The November 2023 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) increased to 42.8, up from 40.1 recorded in October. The index, from the Equipment Leasing & Finance Foundation, 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.
When asked to assess their business conditions over the next four months, none of the executives responding said they believe business conditions will improve, a decrease from 3.7% in October. One-quarter (25.9%) said business conditions will worsen, an increase from 22.2% in October.
“The depth of geopolitical uncertainty, and our own domestic political uncertainty, will have a significant impact on how the economy and our industry fare over the next six to 12 months,” said respondent Sean Duffy, CFO of Global Financial & Leasing Services, LLC, in a statement.
Similarly, none of the respondents said that they believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 3.7% in October. Again, 25.9% believe demand will decline, an increase from 18.5% in October.
“Customers seem to be getting accustomed to the current interest rate environment and the idea that rates may not be coming down for a while,” said Jason Lueders, president, Farm Credit Leasing. “This, combined with the continued draw-down of cash reserves, could lead to increased lease demand going forward, but we will need to keep a closer eye on repayment capacity.”
More respondents evaluated the current U.S. economy as “excellent” in November (3.7%) than in the previous month (0%). Even so, 14.8% evaluated it as “poor,” up from 7.4% in October.
Similarly, 3.7% said that they believe that economic conditions will be “better” over the next six months, but half (51.9%) said that they believe economic conditions will worsen, an increase from 38.5% the previous month.
Source: Equipment Leasing & Finance Foundation