October 21, 2011
The Equipment Leasing & Finance Foundation‘s October 2011 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), released Oct. 21, shows that confidence in the equipment finance market is 50.7, up from the September index of 47.6, indicating some respite from the concerns about the global economic situation, according to the Foundation.
Designed to collect leadership data, the index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $521 billion equipment finance sector, the Foundation says.
When asked about the outlook for the future, survey respondent Valerie Hayes Jester, president of Brandywine Capital Associates, Inc., said, “The equipment finance industry has weathered and will continue to weather the storms of this economy and all its uncertainty. Access to capital is strong, but demand continues to be weak for small business customers. I do not see that dynamic changing in the coming year to 18 months,” the Equipment Leasing & Finance Foundation reported in its press release announcing the results.
The October 2011 survey results from the Equipment Leasing & Finance Foundation follow:
The overall MCI-EFI is 50.7, an increase from the September index of 47.6.
October 2011 MCI Survey Comments from Industry Executive Leadership:
Depending on the market segment they represent, executives have differing points of view on the current and future outlook for the industry.
Bank, Large Ticket
“The equipment leasing and finance industry continues to be resilient. The pipeline of activity remains strong in spite of the negative headline news about the economy.” Executive, Large Ticket, Bank
Bank, Middle Ticket
“Restraint is the operative word with capital equipment spending. Replacement equipment, refinancing at lower rates, and some select industry growth is creating new business today and in the near future.” Harry Kaplun, president, Frost Equipment Leasing and Finance
Financial Services, Small Ticket
“Growth will be a challenge for many in the short-term. Successful companies will be driven by innovation and access to low-cost capital.” Executive, Small Ticket, Financial Services
Why an MCI-EFI?
Confidence in the U.S. economy and the capital markets is a critical driver to the equipment finance industry. Throughout history, when confidence increases, consumers and businesses are more apt to acquire more consumer goods, equipment, and durables, and invest at prevailing prices. When confidence decreases, spending and risk-taking tend to fall. Investors are said to be confident when the news about the future is good and stock prices are rising.
Who participates in the MCI-EFI?
The respondents are comprised of a wide cross section of industry executives, including large-ticket, middle-market, and small-ticket banks, independents, and captive equipment finance companies. The MCI-EFI uses the same pool of 50 organization leaders to respond monthly to ensure the survey’s integrity. Since the same organizations provide the data from month to month, the results constitute a consistent barometer of the industry’s confidence.
How is the MCI-EFI designed?
The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:
How may I access the MCI-EFI?
Survey results are posted on the Foundation website, http://www.leasefoundation.org/IndRsrcs/MCI/, included in the Foundation Forecast newsletter, and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.