Leasing Confidence Eases in September

The September 2022 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) dropped to 48.7 from the August index of 50, according to the Equipment Leasing & Finance Foundation.

“The Fed has made it crystal clear that bringing inflation back to target is its number one goal,” said survey respondent Bruce J. Winter, president of FSG Capital. “More increases to the Fed funds rate are coming, as is quantitative tightening to the tune of $95 billion per month. Highly leveraged participants in our industry will pay the price, as well as highly leveraged borrowers/lessees. 

“While the definition of a true recession is being hotly debated, there is little doubt that more challenging times are ahead and the hopes of a ‘soft landing’ are much less likely.” 

The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $900 billion equipment finance sector.

When asked to assess their business conditions over the next four months, 3.6 percent of executives responding said they believe business conditions will improve over the next four months, a decrease from 14.8% in August. Two of 10 (21.4 percent) said that they believe business conditions will worsen, a decrease from 33.3 percent in August.

Some 7.1 percent of respondents evaluate the current U.S. economy as “excellent,” an increase from none the previous month. Seven in 10 (71.4 percent) evaluate the current U.S. economy as “fair,” down from 85.2 percent in August. One in five (21.4 percent) evaluate it as “poor,” an increase from 14.8 percent last month.

Fewer than one in 10 (7.1 percent) of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 11.1 percent in August. Slightly more than half (53.6 percent) believe economic conditions in the U.S. will worsen over the next six months, an increase from 37 percent the previous month.

Source: Equipment Leasing & Finance Foundation