Confidence in the equipment finance market is 45.9, an increase from the November index of 43.7, according to the latest Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI).

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, an increase from none in November. 55.6% believe business conditions will remain the same over the next four months, up from 46.4% the previous month. 40.7% believe business conditions will worsen, a decrease from 53.6% in November.

Some 7.4% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, a decrease from 10.7% in November; while 70.4% believe demand will “remain the same” during the same four-month time period, an increase from 67.9% the previous month. 

Almost 15% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 14.3% in November. 

When asked, 33.3% of the executives report they expect to hire more employees over the next four months, up from 32.1% in November, while 51.9% expect no change in headcount over the next four months, a decrease from 64.3% last month. 

Asked about the state of the US economy, only 3.7% of the leadership evaluate the status as “excellent” - unchanged from the previous month. 70.4% of the leadership evaluate the current U.S. economy as “fair”, down from 75% in November; and 25.9% evaluate it as “poor” - an increase from 21.4% last month.

None of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, unchanged from November. Most respondents (51.9%) believe economic conditions in the US will worsen over the next six months, a decrease from 71.4% the previous month.

Respondent James D. Jenks, CEO of Global Finance and Leasing Services, says: “In this economy, cash is king and obtaining financing from traditional funding sources will only get more challenging.”

Michael Romanowski, president of Farm Credit Leasing, believes the sector is at an interesting crossroads as economists predict a looming recession and the Fed continues to raise interest rates to tame the inflation beast. “Customers are sharpening the pencil on major expansion opportunities to ensure timing is right for investment. We continue to find solutions to provide value to our customers and markets in this challenging environment,” he says.