The Equipment Leasing & Finance Foundation earlier this month reported a decline of four percentage points in its confidence index to 55.1, citing hesitancy by business owners to make investments.
The survey, which is based on polling of selected company executives, by the affiliate of the Equipment Leasing & Finance Association showed an increase in the percentage of respondents who believed conditions will worsen over the next fourth months and a dropoff in the percentage who see little change in their market. However, two-thirds of those surveyed still anticipate little change in their market or in the U.S. economy over the same period.
“Application activity has been strong in the last 30 days, but I suspect that is pent-up demand from customers who delayed equipment purchases in the last quarter,” said survey respondent Valerie Hayes, president of Brandywine Capital Associates, the statement said. “Rates continue to be low and credit approvals are not a factor. It is more the reluctance of the small business owner to make expansion decisions given our current political environment that concerns me.”
Those surveyed also believe demand for loans and leases will decline and that access to capital to fund equipment acquisitions will be less available. Hiring plans also have been scaled back modestly.
“The U.S. economy is stable with low interest rates serving as a prop,” said Paul Menzel, CEO, Financial Pacific Leasing in a May 19 statement. “My concerns are with foreign economies and our own political landscape and how those will factor into the next 12 months.”
“I look for the second quarter to show improved industry results over the first quarter, but less than 2015. I believe the second half of 2016 will have a bit more uncertainty as the presidential election draws near,” said Thomas Jaschik, president of BB&T Equipment Finance.