Monthly Confidence Index (MCI-EFI)

Monthly Confidence Index – Equipment Finance Industry (MCI-EFI) – January 2023

The Equipment Leasing & Finance Foundation (the Foundation) releases the January 2023 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 48.5, an increase from the December index of 45.9.

When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, President and Chief Executive Officer, Wintrust Specialty Finance, said, “2023 brings uncertainty with a looming recession in front of us, yet robust volume and credit quality continue to be our experience. Being nimble and creative to find solutions will be valuable attributes to have in your organization as we stretch our legs into 2023. Fortunately, this is where the commercial equipment finance industry has excelled and I believe it will once again.”

January 2023 Survey Results

The overall MCI-EFI is 48.5, an increase from the December index of 45.9.

  • When asked to assess their business conditions over the next four months, none of the executives responding said they believe business conditions will improve over the next four months, a decrease from 3.7% in December. 69.2% believe business conditions will remain the same over the next four months, up from 55.6% the previous month. 30.8% believe business conditions will worsen, a decrease from 40.7% in December.
  • None of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, a decrease from 7.4% in December. 88.5% believe demand will “remain the same” during the same four-month time period, an increase from 70.4% the previous month. 11.5% believe demand will decline, down from 22.2% in December.
  • 11.5% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 14.8% in December. 73.1% of executives indicate they expect the “same” access to capital to fund business, an increase from 70.4% last month. 15.4% expect “less” access to capital, up from 14.8% the previous month.
  • When asked, 38.5% of the executives report they expect to hire more employees over the next four months, up from 33.3% in December. 61.5% expect no change in headcount over the next four months, an increase from 51.9% last month. None expect to hire fewer employees, down from 14.8% in December.
  • None of the leadership evaluate the current U.S. economy as “excellent,” down from 3.7% the previous month. 84.6% of the leadership evaluate the current U.S. economy as “fair,” up from 70.4% in December. 15.4% evaluate it as “poor,” a decrease from 25.9% last month.
  • 7.7% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from none in December. 57.7% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 48.2% last month. 34.6% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 51.9% the previous month.
  • In January 23.1% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 37% the previous month. 73.1% believe there will be “no change” in business development spending, up from 59.3% in December. 3.9% believe there will be a decrease in spending, unchanged from last month.

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Survey Demographics

Market Segment

  • Bank 57.7%
  • Captive 11.5%
  • Independent 30.7%

Market Segments Based on Transaction Size of New Business Volume

  • Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 15.4%
  • Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 – $5 Million) 42.3%
  • Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 – $249,999) 42.3%
  • Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 0%

Organization Size

  • Under $50 Million 11.5%
  • $50 Million – $250 Million 11.5%.
  • $250 Million – $1 Billion 30.7%
  • Over $1 Billion 46.1%

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