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Sept 22, 2015

Equipment leasing confidence slows in September

Washington, DC--According to the Equipment Leasing and Finance Foundation’s September monthly confidence index, confidence in the equipment finance market is 61.1, easing from the sharp rise in the August index of 67.4.

When asked to assess their business conditions over the next four months, 22.2 per cent of executives responding said they believe business conditions will improve over the next four months, a decrease from 36.4 per cent in August. Meanwhile, 70.4 per cent of respondents believe business conditions will remain the same over the next four months, an increase from 63.6 per cent in August. However, 7.4 per cent believe business conditions will worsen, an increase from none who believed so the previous month.

Respondents were also down on the expected demand for leases and loans to fund capital expenditures in the next fourth months, with 29.6 per cent believing such demand will increase, a sharp slide down from the 40.9 per cent recorded in August. In addition, 11.1 per cent believe demand will decline, an increase from none who believed so in August.

Of the executives surveyed, 25.9 per cent expect more access to capital to fund equipment acquisitions over the next four months, down from 31.8 per cent in August. Concordantly, 3.7 per cent expect less access to capital, up from none the previous month.

Concerns surrounding the global economy and the energy sector were two primary causes for the dampening forecasts.

“Replacement equipment financing and equipment debt consolidation continue, but expansionary plans are becoming less robust,” said Harry Kaplun, President of Specialty Finance at Frost Bank. “The full effect of international economic problems are the largest inhibitor to growth in the U.S.”

“[I am] concerned about the energy sector and the decline in energy capex.  About 20 per cent of our business is centered in energy, and the decline in oil prices has put several projects on hold.” Added Elaine Temple, president of BancorpSouth Equipment Finance

 

 

 

 

 

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