August 21, 2012
The Equipment Leasing & Finance Foundation (the Foundation) released the August 2012 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) on Aug. 21.
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 $628 billion equipment finance sector. Overall, confidence in the equipment finance market is 50.2, down from the July index of 51.5, reflecting ongoing industry concerns about economic, regulatory, and political uncertainty, according to the Foundation.
“My long-term view of the equipment finance industry is strong; the shorter term view of the U.S. economy and worldwide economy is volatile,” MCI survey respondent John McQueen, Executive Vice President and Head of Wells Fargo Equipment Finance, said in a press release from the Foundation. “The U.S. economic growth rate and the stability for the economy will continue to slow business investment.”
August 2012 Survey Results:
The overall MCI-EFI is 50.2, down from the July index of 51.5.
August 2012 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.
Independent, Small Ticket
“The industry continues to fuel the few areas of the economy that are seeing expansion. Apprehension among small business owners appears to be ever present given world economic affairs, pending elections, and tax code changes. Margin compression continues to be an issue as the availability of capital continues to outweigh demand.” Valerie Hayes Jester, President, Brandywine Capital Associates, Inc.
Independent, Middle Ticket
“We believe demand will continue to be sluggish until after November.” George K. Booth, Chief Executive Officer, Black Rock Capital LLC
Bank, Middle Ticket
“After seven months of growth, equipment capital expenditures are slowing down. Uncertainty with the U.S. economy is the leading reason.” Harry Kaplun, President, Frost Equipment Leasing and Finance
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 can the MCI-EFI be accessed?
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 that link.
Source: Equipment Leasing & Finance Foundation