Confidence in the equipment finance market is 59.6, up slightly from the January index of 59.0, according to the Equipment Leasing & Finance Foundation February 2012 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) released Feb. 23.
These results indicate that industry participants’ optimism is steady despite a cautious outlook about the global economic situation in the coming months, according to the report.
“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,” MCI survey respondent Russell Nelson, president of Farm Credit Leasing Services Corp., said when asked about the outlook for the future. “The current outlook would indicate strong growth in loan and lease demand for equipment finance through 2012.”
February 2012 Survey Results are as follows, according to the Equipment Leasing & Finance Foundation report:
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:
Survey results are posted on the Foundation website at http://www.leasefoundation.org/IndRsrcs/MCI/. Survey respondent demographics and additional information about the MCI are also available at the link above.