The Equipment Leasing & Finance Foundation released the March 2022 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $900 billion equipment finance sector. Overall, confidence in the equipment finance market is 58.2, easing from the February index of 61.8.

When asked about the outlook for the future, MCI-EFI survey respondent Michael Romanowski, President, Farm Credit Leasing, said, “Supply chain issues continue to hamper equipment availability. The Ukraine conflict has enhanced volatility and is contributing to an already unsettled environment. We continue to work closely with our partners and customers to ensure we are advancing our mission in these uncertain times.”

 March 2022 Survey Results

The overall MCI-EFI is 58.2, easing from the February index of 61.8.

• When asked to assess their business conditions over the next four months, 21.4 percent of executives responding said they believe business conditions will improve over the next four months, a decrease from 24.1 percent in February. 50 percent believe business conditions will remain the same over the next four months, down from 69 percent the previous month. 28.6 percent believe business conditions will worsen, an increase from 6.9 percent in February.
• 25 percent of the survey respondents believe demand for leases and loans to fund capital expenditures (CAPEX) will increase over the next four months, up from 24.1 percent in February. 75 percent believe demand will “remain the same” during the same four-month period, an increase from 72.4 percent the previous month. None believe demand will decline, down from 3.5 percent in February.
• 21.4 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 17.2 percent in February. 78.6 percent of executives indicate they expect the “same” access to capital to fund business, a decrease from 82.8 percent last month. None expect “less” access to capital, unchanged from the previous month.
• When asked, 46.4 percent of the executives report they expect to hire more employees over the next four months, up from 44.8 percent in February. 50 percent expect no change in headcount over the next four months, a decrease from 55.2 percent last month. 3.6 percent expect to hire fewer employees, up from none in February.
• 3.6 percent of the leadership evaluate the current U.S. economy as “excellent,” a decrease from 10.3 percent the previous month. 85.7 percent of the leadership evaluate the current U.S. economy as “fair,” down from 86.2 percent in February. 10.7 percent evaluate it as “poor,” an increase from 3.5 percent last month.
• 7.1 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 24.1 percent in February. 57.1 percent indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 58.6 percent last month. 35.7 percent believe economic conditions in the U.S. will worsen over the next six months, an increase from 17.2 percent the previous month.
• In March 42.9 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 44.8 percent the previous month. 57.1 percent believe there will be “no change” in business development spending, up from 51.7 percent in February. None believe there will be a decrease in spending, down from 3.5 percent last month.

March 2021 MCI-EFI Survey Comments from Industry Executive Leadership

Bank, Middle Ticket

“While equity markets, crude, supply chain and global industry trade have all been greatly impacted by the Russian invasion of Ukraine, it is the suffering and loss of life that is most disturbing. I am proud of Key’s immediate humanitarian efforts on behalf of the Ukrainian people.” – Adam Warner, President, Key Equipment Finance

Independent, Small Ticket

“Through 2021, often businesses used their federal government stimulus money to purchase capital equipment and services. The deeper we get into 2022, increasingly, these businesses will return to financing their capital equipment purchases.” –  James D. Jenks, CEO, Global Finance and Leasing Services, LLC