Equipment finance confidence rises

News Story
- 29 Aug 2019 ( #938 ) - Washington, DC, United States
2 min read
76.7% of respondents believe business conditions will remain the same.
76.7% of respondents believe business conditions will remain the same.
The latest Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) shows a rise of sentiment.

The Confidence Index, reflecting sentiment in the USD1 trillion equipment finance sector, reached 58.9, an increase from the July index of 57.9.

When asked to assess their business conditions over the next four months, 16.7% of executives believe business conditions will improve over the next four months, up from 10% in July. Some 76.7% of respondents believe business conditions will remain the same over the next four months, a decrease from 83.3% the previous month, while 6.7% believe business conditions will worsen, unchanged from July.

Most of those surveyed (80%) believe demand for leases and loans to fund capital expenditure will "remain the same", a decrease from 86.7% the previous month. Around 16.7% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 10% who believed so in July.

On the status of the US economy, 36.7% describe it as "excellent," down from 41.4% in July. 60% of the leadership evaluate the current US economy as "fair," an increase from 58.6% the previous month. 3.3% evaluate it as "poor," up from none in July.

But there's not too much optimism looking ahead: 6.7% of the survey respondents believe that US economic conditions will get better over the next six months, unchanged from July. Most survey respondents (73.3%) indicate they believe it will "stay the same" over the next six months, a decrease from 80% the previous month. 20% believe economic conditions in the U.S. will worsen over the next six months, an increase from 13.3% in July.

While the survey found mixed messages about the state of the economy, respondent Quentin Cote, president of Mintaka Financial, is optimistic: "It seems neither businesses nor consumers are over-leveraged. I'm concerned that talk of recession is making businesses pull back, creating a self-fulfilling prophecy."

Meanwhile, David Normandin, president and CEO of Wintrust Specialty Finance, says business demand remains strong. "Credit quality remains solid and portfolio performance continues well."

However, Michael Romanowski, president of Farm Credit Leasing, is less confident. "We do not expect significant new investment by our customers until trade issues are resolved. Customers are being extremely cautious with new investment opportunities."
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