Equipment Finance Industry Confidence Declines in May

The Equipment Leasing & Finance Foundation recently released the May 2011 Monthly Confidence Index for the Equipment Finance Industry. Designed to collect leadership data, the index reports a qualitative assessment of both the prevailing business conditions and expectations for the future, as reported by key executives from the $521 billion equipment finance sector.

Overall, confidence in the equipment finance market is 63.2, down from the April index of 70.3, indicating a more measured outlook due to the uneven performance in certain sectors.

When asked about the outlook for the future, survey respondent Anthony Cracchiolo, president, U.S. Bancorp Equipment Finance, said he is very positive, adding, “Our growth in the near term will depend on the overall business climate in the U.S. Companies need to see regulatory stability and a clear picture of the road ahead in order to increase their capex [capital expenditures] requirements. Once this occurs, this industry will see measurable growth.”

When asked to assess their business conditions over the next four months, 30% of executives responding said they believe business conditions will improve over the next four months, a decrease from 54% in April. Seventy percent of respondents believe business conditions will remain the same over the next four months, an increase from 46% in April.

Twenty-two percent of survey respondents believe demand for leases and loans to fund capex will increase over the next four months, a decrease from 65% in April. Seventy-eight percent believe demand will “remain the same” during the same four-month time period, an increase from 35% the previous month.

Thirty percent of survey respondents believe that U.S. economic conditions will get “better” over the next six months, down from 43% in April. Sixty-three percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, up from 49% in April. Seven percent responded that they believe economic conditions in the U.S. will worsen over the next six months, down from 8% who believed so last month. ◆