The Equipment Leasing & Finance Foundation (the Foundation) released the January 2023 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 $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 percent in December. 69.2 percent believe business conditions will remain the same over the next four months, up from 55.6 percent the previous month. 30.8 percent believe business conditions will worsen, a decrease from 40.7 percent 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 percent in December. 88.5 percent believe demand will “remain the same” during the same four-month time period, an increase from 70.4 percent the previous month. 11.5 percent believe demand will decline, down from 22.2 percent in December.
• 11.5 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 14.8 percent in December. 73.1 percent of executives indicate they expect the “same” access to capital to fund business, an increase from 70.4 percent last month. 15.4 percent expect “less” access to capital, up from 14.8 percent the previous month.
•  When asked, 38.5 percent of the executives report they expect to hire more employees over the next four months, up from 33.3 percent in December. 61.5 percent expect no change in headcount over the next four months, an increase from 51.9 percent last month. None expect to hire fewer employees, down from 14.8 percent in December.
• None of the leadership evaluate the current U.S. economy as “excellent,” down from 3.7 percent the previous month. 84.6 percent of the leadership evaluate the current U.S. economy as “fair,” up from 70.4 percent in December. 15.4 percent evaluate it as “poor,” a decrease from 25.9 percent last month.
• 7.7 percent 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 percent indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 48.2 percent last month. 34.6 percent believe economic conditions in the U.S. will worsen over the next six months, a decrease from 51.9 percent the previous month.
• In January 23.1 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 37 percent the previous month. 73.1 percent believe there will be “no change” in business development spending, up from 59.3 percent in December. 3.9 percent believe there will be a decrease in spending, unchanged from last month.