Washington, DC, October 19, 2023 – The Equipment Leasing & Finance Foundation (the Foundation) releases the October 2023 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 40.1, a decrease from the September index of 50.3.
When asked about the outlook for the future, MCI-EFI survey respondent Mark Bonanno, President and COO, North Mill Equipment Finance, said, “The macroeconomic environment remains challenging. The U.S. is facing the largest peacetime deficit ever. The likelihood of a government shutdown has increased due to U.S. political upheaval and the pending election cycle. Inflation remains significantly above Fed targets, and the possibility of interest rates going higher or remaining elevated for longer than expected is high, making a recession more likely than not.”
October 2023 Survey Results:
The overall MCI-EFI is 40.1, a decrease from the September index of 50.3.
- When asked to assess their business conditions over the next four months, 3.7% of the executives responding said they believe business conditions will improve over the next four months, a decrease from 10.3% in September. 74.1% believe business conditions will remain the same over the next four months, down from 75.9% the previous month. 22.2% believe business conditions will worsen, an increase from 13.8% in September.
- 3.7% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 10.3% in September. 77.8% believe demand will “remain the same” during the same four-month time period, a decrease from 79.3% the previous month. 18.5% believe demand will decline, an increase from 10.3% in September.
- 14.8% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 13.8% in September. 70.4% of executives indicate they expect the “same” access to capital to fund business, down from 72.4% last month. 14.8% expect “less” access to capital, up from 13.8% the previous month.
- When asked, 14.8% of the executives report they expect to hire more employees over the next four months, a decrease from 20.7% in September. 70.4% expect no change in headcount over the next four months, up from 72.4% last month. 14.8% expect to hire fewer employees, up from 6.9% in September.
- None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from the previous month. 92.6% of the leadership evaluate the current U.S. economy as “fair,” up from 89.7% in September. 7.4% evaluate it as “poor,” down from 10.3% last month.
- 3.9% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 6.9% in September. 57.7% indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 62.1% last month. 38.5% believe economic conditions in the U.S. will worsen over the next six months, an increase from 31% the previous month.
- In October, 11.1% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 24.1% the previous month. 77.8% believe there will be “no change” in business development spending, up from 69% in September. 11.1% believe there will be a decrease in spending, an increase from 6.9% last month.