Confidence in the US equipment finance market for the first half of 2016 was lower in February than January, according to the Equipment Leasing and Finance Foundation.
The foundation’s monthly confidence index for the equipment finance industry recorded a fall from 54.0 to 48.3.
Only 3.2% of survey respondents expected demand for leases and loans to fund capital expenditures (capex) to increase over the next four months, a decrease from 10.7% in January. 61.3% anticipated demand to "remain the same" during the same four-month time period, down from 71.4% the previous month. 35.5% answered that demand will decline, an increase from 17.9% who believed so in January.
Seven in ten (71%) respondents said they expect to have the "same" access to capital to fund business, 16.1% "more" access to capital and 12.9% expect "less".
When asked to assess their business conditions over the next four months, 3.2% of executives responding said they believe business conditions will improve over the next four months, a decrease from 10.7% in January. 71% of respondents anticipated business conditions to remain the same and 25.8% believe business conditions will worsen. The share of respondents which expected business conditions to worsen was more than double the one reported in January (10.7%).
When asked about the outlook for the future, MCI-EFI survey respondent Harry Kaplun, president, Specialty Finance, Frost Bank, said: "Uncertainty on the international front and with energy markets is creating capital expenditure restraint. More clarity should emerge in the second half of 2016."
David T. Schaefer, chief executive officer at Mintaka Financial, LLC said: "I think we are beginning to see a bit of a pullback in the small business space. Even though application volume is steady, we are seeing fewer deals being closed. Seems like uncertainty about the economy is creeping in."
William H. Besgen, vice chairman board of directors, Hitachi Capital America, said: "Targeted business volumes seem to be holding in all of our business segments, but the big question is what will the impact of lower oil prices and the apparent negative sentiment created in the energy and banking community do to slow the rest of the economy?"