The Equipment Leasing & Finance Foundation released the September 2019 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). Overall, confidence in the equipment finance market is 54.7, a decrease from the August index of 58.9.

Designed to collect leadership data, 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.

When asked about the outlook for the future, MCI-EFI survey respondent Quentin Cote, CLFP, President, Mintaka Financial, LLC, said, “I'm optimistic about the health of the consumer confidence and unemployment rates. I'm very concerned about the real and psychic impacts of the trade wars on the economy and the size of the deficit limiting the government's tools to keep the economy balanced.”

September 2019 Survey Results

The overall MCI-EFI is 54.7, a decrease from 58.9 in August.  

• When asked to assess their business conditions over the next four months, 10.3 percent of executives responding said they believe business conditions will improve over the next four months, down from 16.7 percent in August; 75.9 percent of respondents believe business conditions will remain the same over the next four months, a decrease from 76.7 percent the previous month; and 13.8 percent believe business conditions will worsen, up from 6.7 percent in August.
• 13.3 percent 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 16.7 percent who believed so in August. In addition, 76.7 percent believe demand will “remain the same” during the same four-month time period, a decrease from 80 percent the previous month; 10 percent believe demand will decline, up from 3.3 percent in August.
• 16.7 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months; 83.3 percent of executives indicate they expect the “same” access to capital to fund business, and none expect “less” access to capital, all unchanged from last month.
• When asked, 30 percent of the executives report they expect to hire more employees over the next four months, a decrease from 31 percent in August; 63.3 percent expect no change in headcount over the next four months, an increase from 62.1 percent last month; and 6.7 percent expect to hire fewer employees, down slightly from 6.9 percent last month.
• 20 percent of the leadership evaluate the current U.S. economy as “excellent,” down from 36.7 percent in August; 80 percent of the leadership evaluate the current U.S. economy as “fair,” an increase from 60 percent the previous month. None evaluate it as “poor,” down from 3.3 percent in August.
• 3.3 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 6.7 percent in August; 70 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 73.3 percent the previous month; and 26.7 percent believe economic conditions in the U.S. will worsen over the next six months, an increase from 20 percent in August.
• In September, 26.7 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 36.7 percent last month; 70 percent believe there will be “no change” in business development spending, an increase from 63.3 percent in August; and 3.3 percent believe there will be a decrease in spending, up from none last month.

September 2019 MCI-EFI Survey Comments from Industry Executive Leadership

Bank, Small Ticket
“Fundamental economic factors remain good and our overall business through the summer has been good. I am concerned that an overly negative tone being presented regarding the economy will have emotional results that fulfill that narrative.” — David Normandin, CLFP, President and CEO, Wintrust Specialty Finance

Bank, Middle Ticket
“Tariffs continue to be the discussion with our customers. Belt tightening will continue until there is a light at the end of the tunnel.  We expect investment in expansion to be muted until trade issues are resolved.” — Michael Romanowski, President, Farm Credit Leasing 

“Companies across many sectors continue to invest in capital equipment projects to compete and succeed.” — Alan Sikora, CEO, First American Equipment Finance