The Equipment Leasing & Finance Foundation finds confidence is rising for industrial equipment.
William G. Sutton, CAE, is the president and CEO of the Equipment Leasing & Finance Association and president of the Equipment Leasing & Finance Foundation. In January 2014, the Foundation released its Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), which reported the highest confidence level in two years, and nearly a ten point jump from even the previous month. Mr. Sutton joined Modern Pumping Today to look closer at the numbers and what they mean for the industrial equipment market.
Modern Pumping Today: What are some of the ground level factors influencing this positive trend in the equipment finance market?
William G. Sutton: There are a number of factors. One is end-of-year optimism looking toward a year where economists are projecting GDP growth of 3 percent, which is the fastest we’ve seen since the recession. The economy seems to be gaining some momentum, and the recent budget agreement has taken some uncertainty off the table.
 
MPT: Is this a trend you expect to continue? Where do most of your respondents see their first quarter for 2014 heading?
William G. Sutton: The respondents to our Foundation’s January Monthly Confidence Index were very optimistic, seeing growth in sectors such as transportation, manufacturing and industrial. Overall, we expect positive growth in 2014. The Equipment Leasing and Finance Foundation’s 2014 Economic Outlook forecasts a pro-growth direction, driven by a number of positive factors. Specifically, a sustainable housing market recovery, low natural gas prices, robust auto sales, record high household wealth, steadily improving credit availability, and improving employment gains. However, these positive trends are counter-balanced by high oil prices, slow international growth, moderating fiscal consolidation, and the continued threat of political uncertainty.
MPT: How steady does the index project demand for equipment leases and loans in the first part of 2014?
William G. Sutton: The Foundation’s Monthly Confidence Index projects business conditions and expectations for the next four months, so we expect Q1 to be solidly in the steady category on range of demand. Some 94 percent of the respondents to our January MCI expected business conditions in the first quarter to remain the same or improve over the next four months, and 97 percent expected demand for equipment to remain the same or increase through the first quarter.
MPT: For your respondents, how does this increase in confidence affect their business practices? Do they foresee an increase in their business development activities or their hiring practices?
William G. Sutton: Some 95 percent of executives responding to our January MCI expected to spend the same or more on business development; in fact, more than half expected to increase their spending on business development. Roughly 91 percent expected headcount to remain the same or grow in the first quarter, with about a third saying they planned to hire during the first quarter.
MPT: Do executives responding to your survey extend the optimism they feel about the equipment finance market into the U.S. economy overall?
William G. Sutton: Yes, they do. They are optimistic, but that optimism is tempered by concerns over the political uncertainty going forward, the regulatory environment and slowing international growth. ■
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MODERN PUMPING TODAY,  February 2014
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