The Equipment Leasing & Finance Foundation has released the February 2023 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), which provides a qualitative assessment of prevailing business conditions and future expectations in the $1 trillion equipment finance sector. The overall confidence in the equipment finance market for February is 51.8, which is an increase from the January index of 48.5.
Regarding the outlook for the future, Jim DeFrank, EVP and Chief Operating Officer, Isuzu Finance of America, Inc., believes that pent-up demand in the light and medium-duty segment of transportation will wane by the third or fourth quarter of this year.
The survey results show that 16.1% of the executives responding believe that business conditions will improve over the next four months, 61.3% believe business conditions will remain the same, and 22.6% believe business conditions will worsen.
“Recession is likely staying on the sidelines as long as there is a shortage of employees to fill open job positions.”
In terms of demand for leases and loans to fund capital expenditures (capex), 9.7% of the respondents believe demand will increase, 71% believe demand will remain the same, and 19.4% believe demand will decline.
Regarding access to capital, 12.9% of the executives expect more access to capital to fund equipment acquisitions over the next four months, 74.2% expect the same access to capital, and 12.9% expect less access to capital. Additionally, 38.7% of the executives expect to hire more employees over the next four months, while 54.8% expect no change in headcount, and 6.5% expect to hire fewer employees.
None of the executives evaluate the current U.S. economy as "excellent." 87.1% evaluate the current U.S. economy as "fair," and 12.9% evaluate it as "poor." In terms of the U.S. economic conditions over the next six months, 3.2% of the respondents believe it will get "better," 54.8% believe it will "stay the same," and 41.9% believe it will worsen.
