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Equipment Confidence Index Reaches 4 Year High

A key indicator of equipment leasing confidence is at the highest level in four years, and up in March over its February level.

March 20, 2015

A key indicator of equipment leasing confidence is at the highest level in four years, and up in March over its February level.

The March Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) is 72.1, up from 66.2 in February. The Equipment Leasing & Finance Foundation released the index.

“Equipment financing demand is continuing, although there are increasing clouds of uncertainty,” said Harry Kaplun, president of Frost Equipment Leasing and Finance. “In particular, the full impact of lower oil prices has not been seen. This favorable event for consumers has a mixed impact commercially.”

Other key findings reported by the Foundation:

  • When asked to assess their business conditions over the next four months, 50 percent of executives responding said they believe business conditions will improve over the next four months, up from 30.3 percent in February. Half of respondents said business conditions will remain the same over the next four months, down from 63.6 percent in February. None said business conditions will worsen, down from 6.1 percent who said so the previous month.
  • Slightly more than 40 percent of survey respondents said demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 42.4 percent in February. About 58 percent said demand will “remain the same” during the same four-month time period, up from 51.5 percent the previous month.  None said demand will decline, down from 6.1 percent in February.
  • One in four executives expect more access to capital to fund equipment acquisitions over the next four months, down from 27.3 percent in February. Three in four indicated that they expect the “same” access to capital to fund business, up from 72.7 percent in February. None expects “less” access to capital, unchanged from the previous month.
  • When asked, 70.8 percent of the executives reported they expect to hire more employees over the next four months, an increase from 39.4 percent in February. One in four expects no change in headcount over the next four months, down from 57.6 percent last month. Slightly more than 4 percent expect to hire fewer employees, up from 3 percent who expected fewer in February.
  • Some 12.5 percent of the leadership evaluate the current U.S. economy as “excellent,” up from 6.1 percent last month. Some 87.5 percent of the leadership evaluate the current U.S. economy as “fair,” down from 90.9 percent in February. None rates it as “poor,” down from 3 percent the previous month.
  • Some 45.8 percent of the survey respondents said that U.S. economic conditions will get “better” over the next six months, relatively unchanged from 45.5 percent who responded so in February.  Some 54.2 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, unchanged from February. None said economic conditions in the U.S. will worsen over the next six months, also unchanged from last month.
  • In March, 58.3 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 48.5 percent in February. Some 41.7 percent said there will be “no change” in business development spending, a decrease from 51.5 percent last month. None believes there will be a decrease in spending, unchanged from last month.

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