Equipment leasing and finance industry confidence plummets to historic low from impact of COVID-19
Confidence in the equipment finance market fell to a record low of 22.3 in April, decreasing from the previous low of 46.0 in the March index
The Equipment Leasing & Finance Foundation has released the April 2020 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). 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 $900 billion equipment finance sector.
Overall, confidence in the equipment finance market fell to a historic low in April of 22.3, decreasing from the previous low of 46.0 in the March index.
April 2020 Survey Results
The overall MCI-EFI is 22.3, a decrease from 46.0 in March.
When asked to assess their business conditions over the next four months, 6.9% of executives responding said they believe business conditions will improve over the next four months, up from 3.7% in March. None believe business conditions will remain the same over the next four months, a decrease from 48.2% the previous month. 93.1% believe business conditions will worsen, an increase from 48.2% in March.
6.9% 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 3.7% in March. 3.5% believe demand will "remain the same" during the same four-month time period, a decrease from 59.3% the previous month. 89.7% believe demand will decline, an increase from 37% in March.
None of the respondents expect more access to capital to fund equipment acquisitions over the next four months, a decrease from 14.8% in March. 53.6% of executives indicate they expect the "same" access to capital to fund business, a decrease from 77.8% last month. 46.4% expect "less" access to capital, an increase from 7.4% the previous month.
When asked, 6.9% of the executives report they expect to hire more employees over the next four months, a decrease from 29.6% in March. 69% expect no change in headcount over the next four months, an increase from 66.7% last month. 24.1% expect to hire fewer employees, down from 3.7% the previous month.
27.6% of the survey respondents believe that U.S. economic conditions will get "better" over the next six months, an increase from 14.8% in March. 6.9% indicate they believe the U.S. economy will "stay the same" over the next six months, a decrease from 37% last month. 65.5% believe economic conditions in the U.S. will worsen over the next six months, up from 48.2% the previous month.
In April, 17.2% of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 22.2% last month. 48.3% believe there will be "no change" in business development spending, down from 70.4% in March. 34.5% believe there will be a decrease in spending, an increase from 7.4% last month.
