The Equipment Leasing & Finance Foundation (the Foundation) released the July 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 46.4, an increase from the June index of 44.1.

When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, President and Chief Executive Officer, Wintrust Specialty Finance, said, “The equipment leasing and finance industry as a whole is relatively nimble. That is and will continue to be tested this year. I am confident that the industry will step up to the challenges and create solutions to meet the needs of our partners and customers.”

July 2023 Survey Results

The overall MCI-EFI is 46.4, an increase from the June index of 44.1.

• When asked to assess their business conditions over the next four months, 7.7 percent of the executives responding said they believe business conditions will improve over the next four months, an increase from 3.3 percent in June. 65.4 percent believe business conditions will remain the same over the next four months, down from 73.3 percent the previous month. 26.9 percent believe business conditions will worsen, an increase from 23.3 percent in June.
• 7.7 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 6.7 percent in June. 69.2 percent believe demand will “remain the same” during the same four-month time period, an increase from 66.7 percent the previous month. 23.1 percent believe demand will decline, down from 26.7 percent in June.
• 7.7 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 6.7 percent in June. 76.9 percent of executives indicate they expect the “same” access to capital to fund business, unchanged from last month. 15.4 percent expect “less” access to capital, down from 16.7 percent the previous month.
• When asked, 15.4 percent of the executives report they expect to hire more employees over the next four months, an increase from 13.3 percent in June. 76.9 percent expect no change in headcount over the next four months, unchanged from last month. 7.7 percent expect to hire fewer employees, down from 10 percent in June.
• 3.9 percent of the leadership evaluate the current U.S. economy as “excellent,” up from none the previous month. 80.8 percent of the leadership evaluate the current U.S. economy as “fair,” down from 83.3 percent in June. 15.4 percent evaluate it as “poor,” a decrease from 16.7 percent last month.
• 11.5 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 6.7 percent in June. 53.9 percent indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 40 percent last month. 34.6 percent believe economic conditions in the U.S. will worsen over the next six months, a decrease from 53.3 percent the previous month.
• In July, 26.9 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 30 percent the previous month. 61.5 percent believe there will be “no change” in business development spending, up from 56.7 percent in June. 11.5 percent believe there will be a decrease in spending, down from 13.3 percent last month.

July 2023 MCI-EFI Survey Comment from Industry Executive Leadership

Independent, Small Ticket

“For most companies, revenues continue to come in, albeit a little slower and financing their capital equipment acquisitions protects their cash flow.” –  James D. Jenks, CEO, Global Finance and Leasing Services, LLC

Bank, Middle Ticket

“Key Equipment Finance remains very encouraged by our clients' financial performance as they navigate the uncertain macroeconomic climate. We have not seen any meaningful credit degradation in our portfolios, and we expect that to hold up for the remainder of the year.” – Adam Warner, President, Key Equipment Finance