Equipment Leasing and Finance Association’s Survey of Economic Activity: Monthly Leasing and Finance Index
November new business volume flat year-over-year, down 19% month-to-month, and up 4.1% year-to-date.
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 November was $8.3 billion, unchanged from new business volume in November 2022. Volume was down 19 percent from $10.4 billion in October. Year-to-date, cumulative new business volume was up 4.1 percent compared to 2022.
Receivables over 30 days were 2.0 percent, down from 2.5 percent in October and up from 1.7 percent in the same period in 2022. Charge-offs were 0.4 percent, unchanged from the previous month and up from 0.3 percent in the year-earlier period.
Credit approvals totaled 76 percent, unchanged from October. Total headcount for equipment finance companies was down 0.4 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in December is 42.5, steady with the November index of 42.8. The MCI-EFI offers a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by a cross-section of equipment finance executives.
ELFA President and CEO Leigh Lytle said, “Moving into the final month of the year, MLFI participants report mixed performance. Year-to-date originations are healthy despite some softness in year-over-year and month-to-month November data. Both losses and delinquencies show more acceptable levels, and no further rate increases by the Fed for the foreseeable future is more good news. With the increasing likelihood of a ‘soft landing’ the equipment finance industry should have a positive year-end.”
George Parker, Co-Chief Executive Officer, VenSource Capital LLC, said, “In November, equipment finance firms continued to showcase their resilience. While some segments continue to recover, most of our industry performed well. Facing sharply higher interest rates, inflationary pressures and geopolitical uncertainties, most industry firms have adapted and found ways to make strides. Even with a dip in monthly volume from October, year-to-date levels show an encouraging uptick. Also reassuring, 30-day delinquencies and charge-offs remain relatively low and steady. These results suggests that our industry is doing a great job of navigating current conditions and is well positioned to leverage opportunities once economic conditions stabilize.”
About ELFA’s MLFI-25
The MLFI-25 is the only near-real-time index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is released globally at 8 a.m. Eastern time from Washington, D.C., each month on the day before the U.S. Department of Commerce releases the durable goods report. The MLFI-25 is a financial indicator that complements the durable goods report and other economic indexes, including the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete view of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.
The MLFI-25 is a time series that reflects two years of business activity for the 25 companies currently participating in the survey. The latest MLFI-25, including methodology and participants, is available at www.elfaonline.org/knowledge-hub/mlfi-25-monthly-leasing-and-finance-index.
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