The Equipment Leasing & Finance Foundation (the Foundation) released the September 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 50.3, steady with the August index of 50.4.
 
When asked about the outlook for the future, MCI-EFI survey respondent Jonathan Albin, Chief Operating Officer, Nexseer Capital, said, “Overall there appears to be good momentum around capital investment, whether driven by infrastructure initiatives, emerging technologies, or onshoring. Barring the emergence of a severe economic threat, I believe this momentum will continue.”

September 2023 Survey Results

The overall MCI-EFI is 50.3, steady with the August index of 50.4.

• When asked to assess their business conditions over the next four months, 10.3 percent of the executives responding said they believe business conditions will improve over the next four months, an increase from 3.6 percent in August. 75.9 percent believe business conditions will remain the same over the next four months, down from 89.3 percent the previous month. 13.8 percent believe business conditions will worsen, an increase from 7.1 percent in August.
• 10.3 percent of the survey respondents believe demand for leases and loans to fund capital expenditures (CAPEX) will increase over the next four months, relatively unchanged from 10.7 percent in August. 79.3 percent believe demand will “remain the same” during the same four-month period, an increase from 78.6 percent the previous month. 10.3 percent believe demand will decline, also relatively unchanged from 10.7 percent in August.
• 13.8 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 7.1 percent in August. 72.4 percent of executives indicate they expect the “same” access to capital to fund business, down from 78.6 percent last month. 13.8 percent expect “less” access to capital, down from 14.3 percent the previous month.
• When asked, 20.7 percent of the executives report they expect to hire more employees over the next four months, a decrease from 22.2 percent in August. 72.4 percent expect no change in headcount over the next four months, up from 70.4 percent last month. 6.9 percent expect to hire fewer employees, down from 7.4 percent in August.
• None of the leadership evaluate the current U.S. economy as “excellent,” down from 3.6 percent the previous month. 89.7 percent of the leadership evaluate the current U.S. economy as “fair,” up from 85.7 percent in August. 10.3 percent evaluate it as “poor,” relatively unchanged from 10.7 percent last month.
• 6.9 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 10.7 percent in August. 62.1 percent indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 60.7 percent last month. 31 percent believe economic conditions in the U.S. will worsen over the next six months, an increase from 28.6 percent the previous month.
• In September, 24.1 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 25 percent the previous month. 69 percent believe there will be “no change” in business development spending, up from 67.9 percent in August. 6.9 percent believe there will be a decrease in spending, relatively unchanged from 7.1 percent last month.

September 2023 MCI-EFI Survey Comment from Industry Executive Leadership

Bank, Small Ticket

“Interest rates have hopefully stabilized. Demand should increase to account for year-end spending.” – Charles Jones, Senior Vice President, 1st Equipment Finance (FNCB Bank)

Independent, Small Ticket

“Inflation and the economy will improve when we return to energy independence.” – James D. Jenks, CEO, Global Finance and Leasing Services, LLC