February 18, 2022
The Equipment Leasing & Finance Foundation’s February 2022 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) reported confidence in the equipment finance market at 61.8, down from January’s index of 63.9.
The index reports a qualitative assessment of current business conditions and expectations for the future, as reported by top executives in the $900 billion equipment finance industry.
Asked about the outlook for the future, James D. Jenks, CEO of Global Finance and Leasing Services, responding to the MCI-EFI survey, said, “The equipment finance industry is strong right now. With inflation, we will experience increases in the cost of money. With the rising cost of money, we are going to experience a downturn in the economy and delinquencies will increase.
February 2022 Survey Results
- When asked to rate their business conditions over the next four months, 24.1% of executives who responded said they believed business conditions would improve over the next four months, down from compared to 25.9% in January. 69% believe trading conditions will remain the same over the next four months, up from 70.4% the previous month. 6.9% think economic conditions will deteriorate, up from 3.7% in January.
- 24.1% of respondents believe demand for leases and loans to finance capital expenditure (capex) will increase over the next four months, up from 25.9% in January. 72.4% believe demand will “stay the same” over the same four-month period, up from 70.4% the previous month. 3.5% believe demand will decline, unchanged from January.
- 17.2% of respondents expect better access to capital to finance equipment acquisitions over the next four months, up from 21.4% in January. 82.8% of executives say they expect the “same” access to capital to fund their businesses, up from 78.6% last month. None expect “less” access to capital, unchanged from the previous month.
- Surveyed, 44.8% of executives say they expect to hire more employees in the next four months, up from 39.3% in January. 55.2% expect no change in the workforce over the next four months, down from 60.7% last month. None expect to hire fewer employees, unchanged from January.
- 10.3% of executives rate the current US economy as “excellent”, down from 14.8% the previous month. 86.2% of executives rate the current US economy as “fair,” up from 81.5% in January. 3.5% rate it as “poor”, unchanged from last month.
- 24.1% of respondents think US economic conditions will “improve” over the next six months, down from 29.6% in January. 58.6% say they think the US economy will “stay the same” over the next six months, down from 63% last month. 17.2% believe that economic conditions in the United States will deteriorate over the next six months, an increase from 7.4% the previous month.
- In February, 44.8% of respondents said they believed their company would increase its spending on business development activities in the next six months, up from 50% the previous month. 51.7% believe there will be “no change” in business development spending, up from 50% in January. 3.5% think there will be a drop in spending, compared to none last month.
Source: Equipment Leasing and Finance Foundation