The Equipment Leasing & Finance Foundation’s November 2018 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) doesn’t bode well for agricultural equipment manufacturers. Overall, confidence in the equipment finance market dropped an additional 5 percent in November to 58.5, a decrease from the October index of 63.2, due to a chronically depressed U.S. farm economy.
Designed to collect leadership data, the index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector.
November 2018 Survey Results:
• When asked to assess their business conditions over the next four months, 10.7 percent of executives responding said they believe business conditions will improve over the next four months, a decrease from 18.5 percent in October. Another 78.6 percent of respondents believe business conditions will remain the same over the next four months, a decrease from 81.5 percent the previous month. Finally, 10.7 percent of respondents believe business conditions will worsen, an increase from none who believed so the previous month.
• 7.1 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, a decrease from 25.9 percent in October, while 82.1 percent believe demand will “remain the same” during the same four-month time period, an increase from 70.4 percent in the previous month. In addition, 10.7 percent of respondents believe demand will decline, up from 3.7 percent who believed so in October.
• 14.3 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down slightly from 14.8 percent in October. In addition, 85.7 percent of executives indicate they expect the “same” access to capital to fund business, a slight increase from 85.2 percent last month. None expect “less” access to capital, which is unchanged from last month.
• When asked, 42.9 percent of the executives report they expect to hire more employees over the next four months, a decrease from 44.4 percent in October. Elsewhere, 46.4 percent of respondents expect no change in headcount over the next four months, a decrease from 48.2 percent last month, while 10.7 percent expect to hire fewer employees, up from 7.4 percent last month.
• According to the survey, 57.1 percent of the leadership evaluate the current U.S. economy as “excellent,” an increase from 51.9 percent in October; 42.9 percent of the leadership evaluate the current U.S. economy as “fair,” a decrease from 48.2 percent last month; and none evaluate it as “poor,” which is unchanged from last month.
• In the U.S., 3.6 percent of the survey respondents believe that the economic conditions will get “better” over the next six months, a decrease from 11.1 percent in October. While 78.6 percent of survey respondents indicate that they believe the U.S. economy will “stay the same” over the next six months, an increase from 74.1 percent from the previous month, 17.9 percent believe economic conditions in the U.S. will worsen over the next six months, an increase from 14.8 percent in October.
• In November, 42.9 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 44.4 percent in October. Others, 57 percent of respondents, believe there will be “no change” in business development spending, an increase from 55.6 percent the previous month. None believe there will be a decrease in spending, which is unchanged from last month.