The Equipment Leasing & Finance Foundation (the Foundation) released the February 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 51.8, an increase from the January index of 48.5.

When asked about the outlook for the future, MCI-EFI survey respondent Jim DeFrank, Executive Vice President and Chief Operating Officer, Isuzu Finance of America, Inc., said, “We still see pent-up demand in the light and medium-duty segment of transportation. However, we feel it will wane by the third or fourth quarter of this year.”

February 2023 Survey Results

The overall MCI-EFI is 51.8, an increase from the January index of 48.5.

• When asked to assess their business conditions over the next four months, 16.1 percent of the executives responding said they believe business conditions will improve over the next four months, an increase from none in January. 61.3 percent believe business conditions will remain the same over the next four months, down from 69.2 percent the previous month. 22.6 percent believe business conditions will worsen, a decrease from 30.8  percent in January.
• 9.7 percent of the survey respondents believe demand for leases and loans to fund capital expenditures (CAPEX) will increase over the next four months, an increase from none in January. 71 percent believe demand will “remain the same” during the same four-month period, a decrease from 88.5 percent the previous month. 19.4 percent believe demand will decline, up from 11.5 percent in January.
• 12.9 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 11.5 percent in January. 74.2 percent of executives indicate they expect the “same” access to capital to fund business, an increase from 73.1 percent last month. 12.9 percent expect “less” access to capital, down from 15.4 percent the previous month.
• When asked, 38.7 percent of the executives report they expect to hire more employees over the next four months, unchanged from January. 54.8 percent expect no change in headcount over the next four months, a decrease from 61.5 percent last month. 6.5 percent expect to hire fewer employees, up from none in January.
• None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from the previous month. 87.1 percent of the leadership evaluate the current U.S. economy as “fair,” up from 84.6 percent in January. 12.9 percent evaluate it as “poor,” a decrease from 15.4 percent last month.
• 3.2 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 7.7 percent in January. 54.8 percent indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 57.7 percent last month. 41.9 percent believe economic conditions in the U.S. will worsen over the next six months, an increase from 34.6 percent the previous month.
• In February 51.6 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 23.1 percent the previous month. 41.9 percent believe there will be “no change” in business development spending, down from 73.1 percent in January. 6.5 percent believe there will be a decrease in spending, up from 3.9 percent last month.

February 2023 MCI-EFI Survey Comment from Industry Executive Leadership

Independent, Small Ticket

“Recession is likely staying on the sidelines as long as there is a shortage of employees to fill open job positions.”  – James D. Jenks, CEO,  Global Financial & Leasing Services, LLC.