Press Release Summary:
According to February 2012 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), overall confidence in equipment finance market is 59.6. This figure, up from January (59.0), indicates steady optimism. Questions ask opinions on current business conditions, expected product demand and access to capital over next 4 months, future employment conditions, state of U.S. economy currently and over next 6 months, as well as business development spending expectations.
Original Press Release:
Equipment Lease Finance Industry Confidence Holds Steady in February
Washington, DC -- The Equipment Leasing & Finance Foundation (the Foundation) releases the February 2012 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 59.6, up slightly from the January index of 59.0, indicating industry participants' optimism is steady despite a cautious outlook about the global economic situation in the coming months.
When asked about the outlook for the future, MCI survey respondent Russell Nelson, President, Farm Credit Leasing Services Corporation, commented, "Continued signs of economic recovery and modest expansion occurring across an increasing number of industries are driving new and replacement capital expenditures, supported by flat interest rate growth. The current outlook would indicate strong growth in loan and lease demand for equipment finance through 2012."
February 2012 Survey Results:
The overall MCI-EFI is 59.6, an increase from the January index of 59.0.
February 2012 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, Large Ticket
"The leasing industry continues to be resilient despite some head winds in the economy. We are seeing significant activity with regard to financing new capex." Executive, Large Ticket, Bank
Bank, Middle Ticket
"I am a somewhat cautious on the prospects for 2012. 100 percent bonus depreciation in 2011 may have accelerated equipment acquisitions into last year. 2012 may have somewhat of a lag effect with bonus deprecation reduced to 50 percent." Thomas Jaschik, President, BB&T Equipment Finance
Bank, Small Ticket
"Improving economic and construction indicators should help demand for financing." Executive, Small Ticket, Bank
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.