The equipment leasing industry is experiencing a historic surge of confidence, as evidenced by the latest monthly report from the Equipment Leasing & Finance Foundation. The industry’s overall confidence index has reached an impressive 73.4, surpassing the December index of 67.5 and marking the highest level since the MCI’s inception in 2009 to monitor recovery after the 2008 economic downturn. This remarkable upswing in confidence reflects an optimistic outlook for the future and is attributed to various factors, including the positive impact of the presidential election, reduced regulation, and rising interest rates. In this blog post, we delve deeper into the survey findings, providing insights into the industry’s growth prospects, lease demand, access to capital, employment outlook, and overall economic conditions.
The Optimistic Outlook
Executives in the equipment finance industry are expressing unprecedented optimism about the future. Survey respondent Thomas Jaschik, president of BB&T Equipment Finance, emphasized that the outlook for U.S. companies has significantly improved since the presidential election. This newfound optimism is backed by expectations of lower taxes, reduced regulation, and increasing interest rates, all of which are anticipated to stimulate capital asset acquisitions and drive substantial equipment finance activity.
Prospects for Business Conditions
A remarkable 74.2% of industry executives surveyed expect business conditions to improve over the next four months, indicating a substantial surge in confidence compared to the 48.4% reported in December. This newfound confidence has been further bolstered by the current high level of small business confidence, leading experts to predict an increased demand for capital expenditures in the coming months.
Surging Lease Demand
Anticipations for lease demand have witnessed an extraordinary surge, with 71.0% of survey respondents expressing the belief that demand for leases and loans to fund capital expenditures (CAPEX) will increase over the next four months. This figure has risen significantly from the 38.7% recorded in December, signifying a promising trend for the industry.
Access to Capital
While the overall confidence in the industry is soaring, respondents’ expectations regarding access to capital have experienced a slight dip. Only 19.4% of executives surveyed anticipate more access to capital for funding equipment acquisitions in the next four months, down from the 22.6% reported in December. Nevertheless, it is important to note that none of the respondents expect less access to capital, maintaining stability from the previous report.
Employment Outlook
Despite the positive outlook for business conditions, there has been a decrease in the percentage of executives expecting to hire more employees over the next four months. The figure now stands at 35.5%, down from 41.9% in December. However, the majority of respondents (61.3%) still believe that their companies will increase spending on business development activities over the next six months, indicating potential growth opportunities in the near future.
Economic Conditions in the U.S.
All respondents in the survey described the current U.S. economy as “fair.” Although there has been a slight decline in optimism regarding the U.S. economic conditions for the next six months (61.3% compared to 71% in December), the majority of respondents (38.7%) still believe that economic conditions will remain the same.
The equipment leasing industry is riding a wave of unprecedented confidence, reaching an all-time high in the monthly confidence index. Industry experts and executives are optimistic about the future, citing positive developments post the presidential election, such as lower taxes, decreased regulation, and rising interest rates, as catalysts for increased capital asset acquisitions and robust equipment finance activity. Despite a slight decrease in expectations for hiring, the survey indicates a strong potential for growth in the industry, with lease demand on the rise and steady access to capital. The positive sentiment regarding the U.S. economy further reinforces the belief that the equipment leasing sector is poised for a period of remarkable expansion. As businesses continue to invest in capital expenditures, the equipment leasing industry stands ready to meet the growing demand and contribute to the nation’s economic prosperity in the months to come.