November 24, 2015
October new business volume down
Washington, DC-- The Equipment Leasing and Finance Association’s (ELFA) ‘Monthly Leasing and Finance Index’ (MLFI-25), which reports economic activity from 25 companies representing a cross section of the $1.046 trillion equipment finance sector, showed their overall new business volume for October was $7.7 billion, down eight per cent from new business volume in October 2014. Volume was down eight per cent from $8.4 billion in September. Year to date, cumulative new business volume increased three per cent compared to 2014.
Receivables over 30 days were one per cent, down from 1.1 per cent the previous month and down from 1.26 per cent in the same period in 2014. Charge-offs were 0.27 per cent, unchanged from the previous month.
Credit approvals totaled 80.1 per cent in October, down slightly from 80.5 per cent in September. Total headcount for equipment finance companies was up five per cent year over year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for November is 60.2, an increase from the previous month’s index of 58.7.
ELFA President and CEO William G. Sutton, CAE, said, “Performance in the equipment finance market was mixed in October: new business volume weakened somewhat—both in terms of the month- and year-earlier periods—while portfolio quality remained steady. Some members report a softening in the demand side of the business and it remains to be seen whether and to what extent the specter of rising interest rates will impact the sector. ”
Anthony Cracchiolo, President and CEO, U.S. Bank Equipment Finance, said, “The markets continue to grow marginally year over year which is favorable. This points to a positive-leaning economy that also shows considerable inconsistency. Credit quality remains strong and at historical levels and the industry is well positioned for solid growth as the economy expands.”
The MLFI-25 is the only index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is released globally at 8 a.m. Eastern time from Washington, D.C., each month on the day before the U.S. Department of Commerce releases the durable goods report. The MLFI-25 is a financial indicator that complements the durable goods report and other economic indexes, including the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete view of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.
The MLFI-25 is a time series that reflects two years of business activity for the 25 companies currently participating in the survey. The latest MLFI-25, including methodology and participants, is available at www.elfaonline.org/Data/MLFI/