According to the Equipment Leasing & Finance Foundation, the January 2021 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) remains steady with pre-pandemic levels.
The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $900 billion equipment finance sector. Overall, confidence in the equipment finance market is 59.6, unchanged from the December index.
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The survey notes just over 33% of executives responding believe business conditions will improve over the next four months, up from 27.6% in December, while over 59% believe business conditions will remain the same.
Almost 52% of the survey respondents believe that U.S. economic conditions will get better over the next six months.
January 2021 Survey Results:
• When asked to assess their business conditions over the next four months, 33.3% of executives responding said they believe business conditions will improve over the next four months, up from 27.6% in December. 59.3% believe business conditions will remain the same over the next four months, a decrease from 62.1% the previous month. 7.4% believe business conditions will worsen, a decrease from 10.3% in December.
• 33.3% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 27.6% in December. 59.3% believe demand will “remain the same” during the same four-month time period, an increase from 55.2% the previous month. 7.4% believe demand will decline, down from 17.2% in December.
• 18.5% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 24.1% in December. 81.5% of executives indicate they expect the “same” access to capital to fund business, an increase from 75.9% last month. None expect “less” access to capital, unchanged from the previous month.
• When asked, 25.9% of the executives report they expect to hire more employees over the next four months, down from 31% in December. 66.7% expect no change in headcount over the next four months, a decrease from 69% last month. 7.4% expect to hire fewer employees, up from none in December.
• None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from the previous month. 77.8% of the leadership evaluate the current U.S. economy as “fair,” up from 72.4% in December. 22.2% evaluate it as “poor,” down from 27.6% last month.
• 51.9% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 55.2% in December. 37% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 34.5% last month. 11.1% believe economic conditions in the U.S. will worsen over the next six months, up from 10.3% the previous month.
• In January 22.2% of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 34.5% last month. 74.1% believe there will be “no change” in business development spending, an increase from 62.1% in December. 3.7% believe there will be a decrease in spending, up slightly from 3.5% last month.