Equipment Finance Industry Confidence Reaches Three-Year High

Confidence in the equipment finance market has surged to its highest level in over three years, according to the Equipment Leasing & Finance Foundation. The November 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) reached 67.5, up significantly from 61.8 in October, marking the most optimistic outlook since August 2021.

The MCI-EFI reflects qualitative assessments of current business conditions and future expectations, as reported by leaders in the $1.3 trillion equipment finance sector. Notably, the survey responses were split evenly between pre- and post-election submissions, underscoring a balanced perspective.

When asked about the outlook for the future, MCI-EFI survey respondent Charles Jones, Senior Vice President, 1^st Equipment Finance, Inc., said, “Businesses still need equipment. Political uncertainty has had an impact and should resolve itself. With the election behind us, businesses will need to continue to operate and look to grow. Calmer heads seem to be prevailing, and the industry is coming back. Delinquency has hopefully leveled, and lenders are licking their wounds and looking forward.”

November 2024 MCI-EFI highlights growing optimism within the sector. Key takeaways include:

• Business Conditions: 43.3% of executives anticipate improved conditions in the next four months, with only 6.7% expecting a decline.
• Capex Demand: Nearly half (48.3%) foresee rising demand for equipment leases and loans, while just 6.9% predict a drop.
• Access to Capital: 37.9% expect increased access to funding, up significantly from October.
• Employment: Workforce expansion plans have surged, with 44.8% planning to hire more staff, while those expecting layoffs dropped to 6.9%.
• Economic Outlook: Optimism about U.S. economic improvement has jumped to 60%, from 37.9% last month.
• Business Development Spending: Over a third (36.7%) intend to boost spending on business development activities.

“I’m still concerned about the state of the consumer and the U.S. from a debt load perspective, but more optimistic on growth after the U.S. election cycle.” Mark Bonanno, President and COO, North Mill Equipment Finance

With the highest confidence level since 2021, the equipment finance industry appears poised for growth as businesses adapt to post-election dynamics and seize new opportunities.