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Equipment Finance Confidence Index rebounds from 2-year low

After reaching a two-year low in November, confidence is up among executives in the equipment finance industry. 

The Monthly Confidence Index for the Equipment Finance Industry — which assesses current conditions and future expectations from executives in the equipment finance sector — landed at 45.9 in December, an increase of 220 basis points (bps) month over month, but a decline compared with 63.9% in December 2021. 

Executive equipment finance confidence is inching back up after November’s low in part due to the view on the state of the U.S. economy, according to the index released by the Equipment Leasing & Finance Foundation. 

Most respondents indicated that the U.S. economy in December is “fair” at 70.4%, a decline of 460 bps MoM. The remaining 25.9% of respondents evaluated the U.S. economy as “poor,” a 450-bps increase MoM. 

Optimism for 2023 

Most of the executives surveyed do not expect economic conditions in the equipment finance sector to change early on in 2023. When looking at the first four months of 2023, 55.6% of respondents believe business conditions will stay the same, a 9.2% increase compared with 46.4% in November. 

A small percentage of business leaders remain optimistic about the equipment finance sector going into 2023, with 3.7% of executives who responded to the survey saying they expect conditions to improve over the next four months, up compared with 0% in November. The same percentage, 3.7%, of executives also rated the U.S. economy as “excellent,” a level that remained flat MoM.  

Still, 40.7% of respondents believe business conditions will worsen over the first four months of 2023, marking an improvement compared with November, when 53.6% of respondents felt conditions would decline.  

As the calendar turns to 2023, economic factors such as Federal Reserve interest rate hikes will go a long way in determining confidence in the sector.