The US equipment finance industry had
increased confidence for January 2012, although many lenders
reported that growth in the sector was not indicative of the
industry as a whole.
Leasing body the Equipment Leasing and Finance
Foundation (ELFF) released their January 2012 Monthly Confidence
Index for the Equipment Finance Industry (MCI-EFI), which found
that confidence in the equipment finance market is 59.0, an
increase from the December index of 57.2.
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Survey respondent Elaine Temple, president of
Bancorpsouth Equipment Finance, said the $628bn market was
adequate, but only due to the need for equipment: “Customers are
still replacing equipment out of necessity rather than
growth. Until the European debt problems have a clearer
resolution and the U.S. elections are decided, business is on the
sidelines.”
When asked to assess their business conditions
over the next four months, 18.4% of executives responding said they
believe business conditions will improve over the next four months,
a fall from 22.2% in December. 76.3% of respondents believe
business conditions will remain the same over the next four months,
a slight boost from 75.7% in December, and 5.3% of executives
believe business conditions will worsen, an increase from 2.8% for
the same period.
However, 34.2% of respondents indicate they
believe their company will increase spending on business
development activities during the next six months, an increase of
12% from December’s figure. 65.8% believe there will be no change
in business development spending, a drop from 77.8% last month, and
no one believes there will be a decrease in spending, a figure that
remains unchanged from the month prior.
While small ticket lenders seemed to be more
hopeful about the future, larger businesses remain uncertain. Harry
Kaplun, president of Frost Equipment Leasing and Finance, said
increased business was not indicative of the strength of the sector
as a whole. “Business continues to improve, but not in a
robust manner. Replacement equipment along with some
strategic capital investments are driving the improvements, while
several historically active equipment segments remain
flat.”
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