The Equipment Leasing & Finance Foundation (the Foundation) releases the November 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. Overall, confidence in the equipment finance market is 67.5, up from the October index of 61.8 and the highest level since August 2021. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1.3 trillion equipment finance sector. Approximately half of the survey responses were submitted prior to the elections and half were submitted after.
When asked about the outlook for the future, MCI-EFI survey respondent Charles Jones, Senior Vice President, 1st Equipment Finance, Inc., said, “Businesses still need equipment. Political uncertainty has had an impact and should resolve itself. With the election behind us, businesses will need to continue to operate and look to grow. Calmer heads seem to be prevailing, and the industry is coming back. Delinquency has hopefully leveled, and lenders are licking their wounds and looking forward.”
November 2024 Survey Results
The overall MCI-EFI is 67.5, up from the October index of 61.8
- Business conditions – When asked to assess their business conditions over the next four months, 43.3% of the executives responding said they believe business conditions will improve over the next four months, an increase from 37.9% in October. 50% believe business conditions will remain the same over the next four months, down from 51.7% the previous month. 6.7% believe business conditions will worsen, down from 3% in October.
- Capex demand – 3% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 44.8% in October. 44.8% believe demand will “remain the same” during the same four-month time period, up from 41.4% the previous month. 6.9% believe demand will decline, a decrease from 13.8% in October.
- Access to capital – 37.9% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 27.6% in October. 62.1% of executives indicate they expect the “same” access to capital to fund business, down from 72.4% last month. None expect “less” access to capital, unchanged from the previous month.
- Employment – When asked, 44.8% of the executives report they expect to hire more employees over the next four months, an increase from 24.1% in October. 48.3% expect no change in headcount over the next four months, down from 65.5% last month. 6.9% expect to hire fewer employees, down from 10.3% in October.
- S. economy – None of the leadership evaluate the current U.S. economy as “excellent,” down from 6.9% the previous month. 96.7% evaluate the economy as “fair,” up from 93.1% in October. 3.3% evaluate it as “poor,” an increase from none last month.
- Economic outlook – 60% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 37.9% in October. 36.7% indicate they believe the U.S. economy will “stay the same” over the next six months, down from 51.7% last month. 3.3% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 10.3% the previous month.
- Business development spending – In November, 36.7% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 34.5% the previous month. 56.7% believe there will be “no change” in business development spending, an increase from 55.2% in October. 6.7% believe there will be a decrease in spending, down from 10.3% last month.
Survey Demographics
Market Segment
- Bank 51.7%
- Captive 17.2%
- Independent 31%
- Other 0%
Market Segments Based on Transaction Size of New Business Volume
- Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 10.7%
- Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 – $5 Million) 42.8%
- Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 – $249,999) 46.4%
- Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 0%
Organization Size
- Under $50 Million 10%
- $50 Million – $250 Million 16.6%.
- $250 Million – $1 Billion 36.6%
- Over $1 Billion 36.6%
November 2024 Survey Comments from Industry Executive Leadership
Independent, Small Ticket
“I’m still concerned about the state of the consumer and the U.S. from a debt load perspective, but more optimistic on growth after the U.S. election cycle.” Mark Bonanno, President and COO, North Mill Equipment Finance
“The election is over. Looking forward, Trump’s policies will improve the economy and begin reducing government over-regulation.” James D. Jenks, CEO, Global Finance and Leasing Services, LLC
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