Equipment Finance Confidence Slips

Nov. 18, 2022
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The November 2022 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) decreased to 43.7 from 45 in October. The Index is published by the Equipment Leasing & Finance Foundation and reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the equipment finance sector.

“While our customers will pay higher interest rates due to continued policy moves by the Federal Reserve, we don’t expect spending on major capital expenditures to be negatively impacted solely by higher rates,” said Bruce J. Winter, president of FSG Capital, in a statement. “We are, however, on the lookout for slowing in certain sectors that will eventually slow down or delay spending on equipment purchases.”

When asked to assess their business conditions over the next four months, none of the executives responding said that they believe business conditions will improve over the next four months, unchanged from October. About half (46.4 percent) said business conditions will remain the same and 53.6 percent said business conditions will worsen, an increase from 37.5 percent in October.

One in 10 (10.7 percent) of respondents said demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 8.3 percent in October.

Only 3.6 percent of respondents evaluate the current U.S. economy as “excellent,” a decrease from 8.3 percent the previous month. Three-quarters (75 percent) evaluate is as “fair” and 21.4 percent call it “poor.”

None of the respondents said that they believe that U.S. economic conditions will be “better” over the next six months, and 71.4 percent believe economic conditions will worsen.

Source: Equipment Leasing & Finance Foundation