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03 27 2014

03 27 2014

Equipment Leasing Industry Confidence Highest in Two Years

The equipment leasing industry is looking forward to a potentially strong rest of the year, a new report has found. According to the Equipment Leasing & Finance Association’s Monthly Confidence Index for the Equipment Finance Industry, leaders in the sector are feeling more confident than they have in recent years. Confidence now ranks at 65.1 as of March, the highest level in two years and an increase from February’s 63.3 reading.

These first quarter readings are the highest since April 2011, and respondents said they anticipate gains in the sector over the next three months.

“Considering we are coming off what are typically slower months and the likelihood that our extra-aggressive winter further impacted new business, we remain optimistic for 2014,” Daryn Lecy, VP of operations at an equipment leasing firm said. “We are fortunate to be experiencing year-over-year growth, increasing demand, and overall solid delinquency levels.”

Survey results show positive outlook

When industry leaders were asked to predict business conditions over the next four months, 31.4 percent of respondents said they anticipate conditions will develop positively, an increase from 21.2 percent who said the same last month. A further 65.7 percent of survey participants said they believe conditions will remain roughly the same during that period, down from 72.7 percent who responded similarly last month. In February, 6.1 percent said they anticipated business to worsen – in March, that number had dropped to 2.9 percent.

Business owners also expect improved ease of access to working capital, which would allow them to increase business equipment purchases.  The same rate as reported in February – 31.4 percent of respondents – said they anticipated to gain capital more easily. Furthermore, upon acquiring additional equipment, industry leaders are confident that demand for leases and loans will tick upward over the next four months. Just over 31 percent of participants said these numbers are likely to improve, up from 24.2 percent in February. Nearly 63 percent said demand will hold steady, down from the almost 70 percent of respondents who said the same last month. Fewer individuals said they believe conditions will grow worse – just 5.7 percent – down from 6.1 percent who indicated these same beliefs in February.

Although overall confidence in the U.S. economy may not be unanimously sunny, more equipment financing and leasing professionals have come to believe the economy is in fair shape and will continue to grow stronger over the coming four months. In March, 5.7 percent of respondents rated the national economy as “excellent,” up from 3 percent in February. Nearly 89 percent of individuals questioned said they saw the economy as “fair,” down from 93.8 percent who said the same last month, while 5.7 percent saw the economy as “poor,” an increase from 3 percent in February.

Mixed though these numbers may be, 40 percent of executives surveyed said they plan on expanding hiring over the next quarter, around the same number from last month. Approximately 60 percent expect hiring practices to remain the same. Perhaps most significantly, no respondents said they expect to have fewer employees by the end of the quarter, down from 6.3 percent who said they were anticipating layoffs or a general decrease in their payrolls in February.

Due to the increased ease of access to capital, potential increases in staff and a generally positive outlook forecasted for the coming months, many business owners may be considering equipment leasing options for their businesses. These individuals should consider approaching National Funding for more information.


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