The Equipment Leasing & Finance Foundation (the Foundation) released the May 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 40.6, a decrease from the April index of 47.0.

When asked about the outlook for the future, MCI-EFI survey respondent James D. Jenks, CEO, Global Finance and Leasing Services, LLC, said, “Until we get back to energy independence, I don't see an uptick in the economy in the foreseeable future.”

May 2023 Survey Results

The overall MCI-EFI is 40.6, a decrease from the April index of 47.0.

• 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 11.1 percent in April. 51.9 percent believe business conditions will remain the same over the next four months, down from 70.4 percent the previous month. 48.2 percent believe business conditions will worsen, an increase from 18.5 percent in April.
• 3.6 percent of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, unchanged from April. 53.6 percent believe demand will “remain the same” during the same four-month time period, a decrease from 70.4 percent the previous month. 42.9 percent believe demand will decline, up from 25.9 percent in April.
• 10.7 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 7.4 percent in April. 75 percent of executives indicate they expect the “same” access to capital to fund business, a decrease from 77.8 percent last month. 14.3 percent expect “less” access to capital, down from 14.8 percent the previous month.
• When asked, 17.9 percent of the executives report they expect to hire more employees over the next four months, a decrease from 33.3 percent in April. 67.9 percent expect no change in headcount over the next four months, an increase from 51.9 percent last month. 14.3 percent expect to hire fewer employees, down from 14.8 percent in April.
• None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from the previous month. 85.7 percent of the leadership evaluate the current U.S. economy as “fair,” down from 88.9 percent from April. 14.3 percent evaluate it as “poor,” an increase from 11.1 percent last month.
• 3.6 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 7.4 percent in April. 32.1 percent indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 48.2 percent last month. 64.3 percent believe economic conditions in the U.S. will worsen over the next six months, an increase from 44.4 percent the previous month.
• In May, 35.7 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. 53.6 percent believe there will be “no change” in business development spending, up from 44.4 percent in April. 10.7 percent believe there will be a decrease in spending, down from 18.5 percent last month.