Equipment Leasing and Finance Association’s Survey of Economic Activity: December 2017 Leasing and Finance Index
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 December was $12.8 billion, up 6 percent year-over-year from new business volume in December 2016. Volume was up 71 percent month-to-month from $7.5 billion in November in a typical end-of-year spike. Cumulative new business volume for 2017 was up 5 percent from 2016.
Receivables over 30 days were 1.50 percent, unchanged from the previous month and up from 1.40 percent the same period in 2016. Charge-offs were 0.48 percent, up from 0.42 percent the previous month, and up from 0.42 percent in the year-earlier period.
Credit approvals totaled 77.6 percent in December, up from 73.6 percent in November. Total headcount for equipment finance companies was up 15.1 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) in January is at an all-time high of 75.3, up from 69.4 in December.
ELFA President and CEO Ralph Petta said, “December new business volume registered the typical end-of-quarter, end-of-year spike as member companies scrambled to close out the year. While 2017 was a good year, overall, for the equipment finance industry, most industry observers look for even stronger business activity in 2018. The reasons for this optimistic outlook? A continued healthy and growing economy, an abundance of liquidity, strong capex demand buoyed by recent tax law changes, and a sense of confidence by the business community not seen since just after the 2016 election. Absent a wild card event or external shock of some sort, we are bullish about 2018.”
Thomas M. Jaschik, President, BB&T Equipment Finance, said, “The equipment finance industry finished 2017 with a strong uptick in new business volume. This was due in large part to renewed optimism for future economic performance as well as improving industry conditions in key capital-intensive industries such as energy and transportation. Industry participants are very bullish on the prospects for 2018 as evidenced by the record high in the Monthly Confidence Index. With lower corporate taxes and favorable interest rates and credit environment, as well as an economy poised to breakout from its pattern of modest growth, I believe these dynamics will create the perfect storm to accelerate growth in the equipment finance industry in 2018.”