US equipment finance confidence up in January

The US equipment finance industry is entering 2025 on a high note, with confidence levels rising for the third consecutive month in January. The Equipment Leasing & Finance Foundation (the Foundation) announced that its January 2025 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) increased to 69.6, up from 68.8 in December, marking the highest reading since July 2021. This upward trend underscores the optimism within the US$1.3 trillion equipment finance sector as it navigates a new year of opportunities and challenges.

The MCI-EFI offers a qualitative assessment of business conditions and expectations for the future, as reported by key executives in the industry.

“As you consider further anticipated rate cut(s), capacity reshoring and the potential for 100% bonus depreciation being reinstated, we expect companies to increase investments in new technology, resources, and production equipment. This should equate to increased demand for structured leasing and equipment finance products as companies look to maximise associated tax benefits.

“Having performed well over the past 24 months, the equipment finance sector is justly poised for growth as we head into 2025 and beyond,” he added.

The survey revealed several key trends reflecting the state of the industry:

• Business conditions: Over half of executives (57.1%) expect improved business conditions in the next four months, while 38.1% anticipate conditions will remain stable, up from 32.1% in December. Only 4.8% foresee a decline, down from 7% the previous month.
• Capital expenditures (Capex): Expectations for increased demand for leases and loans to fund capex dropped to 6%, compared to 53.6% in December. However, 47.6% believe demand will remain steady, and only 4.8% anticipate a decline.
• Access to capital: Respondents reported no changes in access to capital, with 28.6% predicting greater availability for equipment acquisitions and 71.4% expecting stable conditions.
• Employment outlook: The hiring outlook improved, with 47.6% planning to add staff over the next four months, compared to 42.9% in December. None of the respondents anticipate reducing headcount, a notable improvement from December’s 10.7%.
• US economy: Economic perceptions were largely stable, with 9.5% rating the economy as “excellent,” up from 7.1%, and 85.7% viewing it as “fair.” A slightly higher percentage (4.8%) considered the economy “poor.”