The Equipment Leasing & Finance Foundation (the Foundation) releases the October 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. Overall, confidence in the equipment finance market is 61.8, steady with the September index of 61.9, which was the highest level since January 2022. 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 trillion equipment finance sector.
When asked about the outlook for the future, MCI-EFI survey respondent Brent Hall, CLFP, Senior Vice President, Alliance Funding Group, said, “The future for the American economy actually looks bright compared to the international scene, and manufacturing will continue to re-shore with increasing need for capital spending.”
October 2024 Survey Results
The overall MCI-EFI is 61.8, steady with the September index of 61.9.
- When asked to assess their business conditions over the next four months, 37.9% of the executives responding said they believe business conditions will improve over the next four months, a decrease from 40% in September. 51.7% believe business conditions will remain the same over the next four months, relatively unchanged from 52% the previous month. 10.3% believe business conditions will worsen, up from 8% in September.
- 44.8% 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% in September. 41.4% believe demand will “remain the same” during the same four-month time period, down from 52% the previous month. 13.8% believe demand will decline, an increase from 8.4% in September.
- 27.6% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 24% in September. 72.4% of executives indicate they expect the “same” access to capital to fund business, down from 76% last month. None expect “less” access to capital, unchanged from the previous month.
- When asked, 24.1% of the executives report they expect to hire more employees over the next four months, an increase from 20% in September. 65.5% expect no change in headcount over the next four months, down from 68% last month. 10.3% expect to hire fewer employees, down from 12% in September.
- 6.9% of the leadership evaluate the current U.S. economy as “excellent,” up from none the previous month. 93.1% evaluate the economy as “fair,” down from 96% in September, while none evaluate it as “poor,” a decrease from 4% last month.
- 37.9% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 24% in September. 51.7% indicate they believe the U.S. economy will “stay the same” over the next six months, down from 76% last month. 10.3% believe economic conditions in the U.S. will worsen over the next six months, an increase from none the previous month.
- In October, 34.5% of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 36% the previous month. 55.2% believe there will be “no change” in business development spending, down from 56% in September. 10.3% believe there will be a decrease in spending, up from 8% last month.
Survey Demographics
Market Segment
- Bank 51.8%
- Captive 14.8%
- Independent 33.3%
- Other 0%
Market Segments Based on Transaction Size of New Business Volume
- Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 6.6%
- Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 – $5 Million) 43.3%
- Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 – $249,999) 50%
- Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 0%
Organization Size
- Under $50 Million 10%
- $50 Million – $250 Million 13.3%.
- $250 Million – $1 Billion 46.6%
- Over $1 Billion 30%
October 2024 Survey Comments from Industry Executive Leadership
Bank, Small Ticket
“With the upcoming election close and the Fed starting the cycle of rate cuts, the uncertainty around these specific concerns will lessen. I think this will help business get back to work solving their customers’ problems and increase investment in capital equipment. Additionally, equipment finance companies, specifically within the bank segment, have unfrozen and are actively investing in the equipment finance sector providing needed access to capital at more attractive rates.” David Normandin, CLFP, President and Chief Executive Officer, Wintrust Specialty Finance
Bank, Large Ticket
“Lower interest rates will ignite capex for smaller companies that have been on the sidelines for a few years and need to add or replace equipment for growth. Getting past the election should provide some clarity on the economic direction of the U.S., thus more capex investments can be made. Lastly, onshoring will continue to promote infrastructure investment which requires capex spending to execute.” Jeffry Elliott, CLFP, President, Huntington Equipment Finance
Captive, Small Ticket
“The Fed’s intent to lower interest rates combined with stabilizing of inflation will stimulate investment, spending and expansion.” Jim DeFrank, EVP and Chief Operating Officer, Isuzu Finance of America, Inc.
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