EFI Confidence holds steady in December from November.
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Press Release Summary:
According to leadership data collected by December 2011 Monthly Confidence Index for Equipment Finance Industry (MCI-EFI), overall confidence in equipment finance market is 57.2. Percentage levels also show 22% of executives think business conditions over next 4 months will improve, 75.0% say they will remain same, and 2.8% think they will worsen. Demand for leases and loans to fund capital expenditures, access to capital to fund equipment acquisitions, and employee hiring are also detailed.
Original Press Release:
Equipment Finance Industry Confidence Holds Steady in December
Washington, DC -- The Equipment Leasing & Finance Foundation (the Foundation) releases the December 2011 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. Designed to collect leadership data, the index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $628 billion equipment finance sector. Overall, confidence in the equipment finance market is 57.2, a nominal decrease from the November index of 57.4, indicating steadying optimism about business activity despite ongoing concerns about the global economic situation.
When asked about the outlook for the future, survey respondent Rick Remiker, President, Huntington Equipment Finance, said, "The equipment leasing and finance industry has held its own over the past few quarters and favorably weathered several macroeconomic challenges. 2012 may bring greater opportunities as companies replace aged equipment and invest in newer technology and expanded capacity."
December 2011 Survey Results:
The overall MCI-EFI is 57.2, a decrease from the November index of 57.4.
December 2011 MCI Survey Comments from Industry Executive Leadership:
Depending on the market segment they represent, executives have differing points of view on the current and future outlook for the industry.
Bank, Middle Ticket
"Fear in Europe and its global economic impact, the inability of Congress to agree on deficit reduction matters, and the failure of the Super Committee, combined with an election year, lead me to believe that the demand for new capex will continue to be limited. Any high-quality borrowers will find attractive transactions as lenders need assets and they will drive down their spreads and become more relaxed on structure to win the deal." Executive, Middle Ticket, Bank
Bank, Middle Ticket
"The long-term future is okay as businesses must continue to finance acquisitions. I am concerned that in the short term people are continuing to delay capital expenditures." Elaine Temple, President, Bancorpsouth Equipment Finance
Independent, Small Ticket
"The overshadowing of the European financial problems dampens my optimism for the U.S. economy over the next 12-18 months. There are positive signs the U.S. economy is improving, but [there is] concern about how a banking crisis in Europe will affect the U.S. economy and bank liquidity." William H. Besgen, President and COO, Hitachi Capital America Corp.
Why an MCI-EFI?
Confidence in the U.S. economy and the capital markets is a critical driver to the equipment finance industry. Throughout history, when confidence increases, consumers and businesses are more apt to acquire more consumer goods, equipment and durables, and invest at prevailing prices. When confidence decreases, spending and risk-taking tend to fall. Investors are said to be confident when the news about the future is good and stock prices are rising.
Who participates in the MCI-EFI?
The respondents are comprised of a wide cross section of industry executives, including large-ticket, middle-market and small-ticket banks, independents and captive equipment finance companies. The MCI-EFI uses the same pool of 50 organization leaders to respond monthly to ensure the survey's integrity. Since the same organizations provide the data from month to month, the results constitute a consistent barometer of the industry's confidence.
How is the MCI-EFI designed?
The survey consists of seven questions and an area for comments, asking the respondents' opinions about the following:
1. Current business conditions
2. Expected product demand over the next four months
3. Access to capital over the next four months
4. Future employment conditions
5. Evaluation of the current U.S. economy
6. U.S. economic conditions over the next six months
7. Business development spending expectations
8. Open-ended question for comment
How may I access the MCI-EFI?
Survey results are posted on the Foundation website, www.leasefoundation.org/IndRsrcs/MCI/, included in the Foundation Forecast newsletter and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that provides vision for the equipment leasing and finance industry through future-focused information and research. Primarily funded through donations, the Foundation is the only organization dedicated to future-oriented, in-depth, independent research for the leasing industry. Visit the Foundation online at www.LeaseFoundation.org.