Equipment Finance Industry Confidence Hits Highest Level in Over Two Years

Confidence in the equipment finance sector has surged to its highest point since February 2022, according to the August 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) released by the Equipment Leasing & Finance Foundation. The index rose to 58.4, a significant increase from July's 50.7.

The latest MCI-EFI report highlights a positive shift in business sentiment within the $1 trillion equipment finance market. Key industry executives reported increased optimism about both current conditions and future expectations.

Jeff Elliott, President of Huntington Equipment Finance, commented, “Our overall confidence in the near-term future of the industry is high. We’re expecting economic conditions for businesses to improve over the next six months as interest rates decline and investment in U.S. manufacturing continues to grow, which in turn will lead to rising demand for funding to complete capex projects.”

Survey findings for August include:

Business Conditions: 37.5% of executives expect business conditions to improve over the next four months, a sharp rise from 3.9% in July. Meanwhile, 45.8% expect conditions to remain the same, down from 76.9%, and 16.7% anticipate a decline, a decrease from 19.2% last month.
Demand for Capital: 41.7% foresee increased demand for leases and loans, up from 11.7% in July. Conversely, 20.8% expect demand to decline, an increase from 15.4%.
Access to Capital: 20.8% of respondents expect more access to capital, slightly up from 19.2% last month. The majority, 75%, anticipate no change in access, down from 76.9%.
Employment: 20.8% plan to hire more employees, a slight decrease from 23.1% in July. 70.8% expect no change in headcount, up from 69.2%.
Economic Outlook: No executives rate the U.S. economy as “excellent.” However, 91.7% consider it “fair,” an improvement from 84.6% last month. Only 8.3% view it as “poor,” down from 15.4%. Looking ahead, 37.5% believe economic conditions will improve, up from 19.2%, while 20.8% expect a deterioration, down from 23.1%.
Business Development Spending: 33.3% plan to increase business development spending, up from 19.2% in July. 62.5% expect no change in spending, a decrease from 73.1%.

Overall, the August index reflects a buoyant mood within the equipment finance industry, with executives increasingly optimistic about future economic conditions and business opportunities.