Confidence in the equipment finance market reached the highest level since January 2022, according to the Equipment Leasing & Finance Foundation. With the release of its September Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), confidence is 61.9, up from 58.4 in August. The survey upon which the index is based was taken prior to the Fed’s recent reduction of the interest rate.
“Many firms, particularly small and medium-sized businesses, have been delaying equipment purchases, citing continued high interest rates and uncertainty about the economy amplified by the upcoming election,” said respondent Nancy Pistorio, president, Madison Capital, in a statement. “This ‘let’s wait and see what happens’ mindset has contributed to diminished demand for equipment financing. Assuming the Federal Reserve lowers rates this fall, and once the election is behind us, I think we will begin to see an increase in business volumes.
“Barring any prolonged adverse reaction from the financial markets to the election outcome, I anticipate a more robust December and first quarter 2025 for our industry.”
Four of 10 respondents said that they believe business conditions will improve over the next four months, up slightly from 37.5% in August. Eight percent said conditions will worsen, down from 16.7% last month.
Some 44% of respondents said demand for leases and loans to fund capital expenditures will increase over the next four months, up from 41.7% in August. Some 4% said demand will decline, a drop from 20.8% in August.
None of the respondents evaluate the current U.S. economy as “excellent,” unchanged from the previous month; and 96% evaluate the economy as “fair,” up from 91.7% in August. About a quarter (24%) said that U.S. economic conditions will get “better” over the next six months, down from 37.5% in August. The rest, 76%, indicated that they believe the U.S. economy will “stay the same” over the next six months, a jump up from 41.7% last month.
