The Equipment Leasing & Finance Foundation’s June 2018 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) reported a slight uptick from May’s report. 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 $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 66.2 in June, up from the May index of 64.6.
When asked about the outlook for the future, MCI-EFI survey respondent Valerie Hayes Jester, President, Brandywine Capital Associates, said, “We are still experiencing strong demand. Current and almost certain future interest rate hikes seem to be driving the marketplace. We keep hearing from our customers that they need to get projects moving before financing costs rise. We see strong expansion of many small businesses with many current customers coming back for additional approvals. All signs are ‘go’ at the midpoint of this year!”
Confidence in the U.S. economy and the capital markets is a critical driver to the equipment finance industry. Throughout history, when confidence increases, consumers and businesses are more apt to acquire more consumer goods, equipment and durables, and invest at prevailing prices. When confidence decreases, spending and risk-taking tend to fall. Investors are said to be confident when the news about the future is good and stock prices are rising.
The respondents are comprised of a wide cross-section of industry executives, including large-ticket, middle-market and small-ticket banks, independents, and captive equipment finance companies. The MCI-EFI uses the same pool of 50 organization leaders to respond monthly to ensure the survey’s integrity. Since the same organizations provide the data from month to month, the results constitute a consistent barometer of the industry's confidence.
The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:
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