The Equipment Leasing & Finance Foundation (the Foundation) releases the October 2022 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. 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. Overall, confidence in the equipment finance market is 45, a decrease from the September index of 48.7.
When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, CLFP, President and CEO, Wintrust Specialty Finance, said, “I am optimistic about our industry and our customers finding solutions to manage challenging economic conditions. As the rate of change increases, I think that our industry is well positioned to adapt and continue to find ways to win.”
October 2022 Survey Results
The overall MCI-EFI is 45, a decrease from the September index of 48.7.
- When asked to assess their business conditions over the next four months, none of the executives responding said they believe business conditions will improve over the next four months, a decrease from 3.6% in September. 62.5% believe business conditions will remain the same over the next four months, down from 75% the previous month. 37.5% believe business conditions will worsen, an increase from 21.4% in September.
- 8.3% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, a decrease from 10.7% in September. 66.7% believe demand will “remain the same” during the same four-month time period, a decrease from 71.4% the previous month. 25% believe demand will decline, up from 17.9% in September.
- 4.2% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 14.3% in September. 87.5% of executives indicate they expect the “same” access to capital to fund business, an increase from 71.4% last month. 8.3% expect “less” access to capital, down from 14.3% the previous month.
- When asked, 29.2% of the executives report they expect to hire more employees over the next four months, up from 28.6% in September. 66.7% expect no change in headcount over the next four months, an increase from 64.3% last month. 4.2% expect to hire fewer employees, down from 7.1% in September.
- 8.3% of the leadership evaluate the current U.S. economy as “excellent,” an increase from 7.1% the previous month. 66.7% of the leadership evaluate the current U.S. economy as “fair,” down from 71.4% in September. 25% evaluate it as “poor,” an increase from 21.4% last month.
- None of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 7.1% in September. 41.7% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 39.3% last month. 58.3% believe economic conditions in the U.S. will worsen over the next six months, an increase from 53.6% the previous month.
- In October 25% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 28.6% the previous month. 70.8% believe there will be “no change” in business development spending, down from 71.4% in September. 4.2% believe there will be a decrease in spending, an increase from none last month.
Survey Demographics
Market Segment
- Bank 54.2%
- Captive 20.8%
- Independent 25%
Market Segments Based on Transaction Size of New Business Volume
- Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 16.7%
- Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 – $5 Million) 41.7%
- Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 – $249,999) 41.7%
- Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 0%
Organization Size
- Under $50 Million 8.3%
- $50 Million – $250 Million 20.8%.
- $250 Million – $1 Billion 25%
- Over $1 Billion 45.8%
October 2022 Survey Comments from Industry Executive Leadership
Independent, Small Ticket
“Until the mid-term elections are over, the economy is not likely to see much change.” James D. Jenks, CEO, Global Finance and Leasing Services, LLC
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