Equipment Leasing and Finance Association’s Survey of Economic Activity: Monthly Leasing and Finance Index

June New Business Volume Down 2 Percent Year-over-year, Up 27 Percent Month-to-month, Up 5 Percent Year-to-date

WASHINGTON--()--The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity from 25 companies representing a cross section of the $1 trillion equipment finance sector, showed their overall new business volume for June was $9.8 billion, down 2 percent year-over-year from new business volume in June 2016. Volume was up 27 percent month-to-month from $7.7 billion in May. Year to date, cumulative new business volume was up 5 percent compared to 2016.

Receivables over 30 days were 1.30 percent, down from 1.40 percent the previous month and down from 1.40 percent in the same period in 2016. Charge-offs were 0.38 percent, down from 0.47 percent the previous month, and down from 0.65 percent in the year-earlier period.

Credit approvals totaled 75.9 percent in June, down from 77 percent in May. Total headcount for equipment finance companies was up 16.6 percent year over year, largely attributable to continued acquisition activity at an MLFI reporting company.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for July is 63.5, steady with the two previous months.

ELFA President and CEO Ralph Petta said, “Industry volume strengthened in the second quarter, building on strong capex investment in the prior quarter. Business owners are taking advantage of low interest rates, favorable employment data, an equity market that continues to defy gravity, and other solid fundamentals to replace aging assets and, in some cases, expand operations, requiring installation of new equipment. And, despite scattered reports of rising delinquencies and charge offs, credit markets continue to perform well. The wild card is whether markets will continue to grow despite gridlock in Washington, D.C., and other headwinds or eventually pull back as a result.”

David Gilmore, Senior Vice President, Global Marketing and Sales, John Deere Financial, said, “Customer confidence in our key market segments (agricultural and construction) showed signs of improvement through the second quarter. Stabilization of agricultural commodity prices and rationalization of previously high levels of excess used equipment allowed customers to invest in newer technology and selectively update their fleets. Rental utilization, a key indicator of U.S. construction market strength, is moving in a positive direction as construction investment in residential, commercial and institutional sectors offset slow oil/gas and government sector growth. Long-term clarity around trade and tax policy could solidify short-term positive market trends.”

About the ELFA’s MLFI-25

The MLFI-25 is the only index that reflects capex—the volume of commercial equipment financed in the U.S.—and is released as a complementary economic indicator the day before the U.S. Department of Commerce releases the durable goods report.

To read a detailed description and methodology of the MLFI-25, visit http://www.elfaonline.org/Data/MLFI/

About the ELFA

The Equipment Leasing and Finance Association (ELFA) is the trade association that represents companies in the $1 trillion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. ELFA members are the driving force behind the growth in the commercial equipment finance market and contribute to capital formation in the U.S. and abroad. Its more than 575 members include independent and captive leasing and finance companies, banks, financial services corporations, broker/packagers and investment banks, as well as manufacturers and service providers. ELFA has been equipping business for success for more than 50 years. For more information, please visit www.elfaonline.org.

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Contacts

ELFA
Amy Vogt, 202-238-3438
Vice President, Communications and Marketing
avogt@elfaonline.org

Contacts

ELFA
Amy Vogt, 202-238-3438
Vice President, Communications and Marketing
avogt@elfaonline.org