ELFF: Equipment Finance Confidence Continues to Rise

Overall, confidence in the equipment finance market is 65.5, an improvement from the October 2010 index of 58.8, according to the Equipment Leasing & Finance Foundation’s release of the November 2010 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI).

“The optimism shared by the speakers and attendees at the ELFA Annual Convention may be one of the best leading indicators that the industry is on the rebound,” said survey respondent Adam Warner, president, Key Equipment Finance. “This annual gathering always provides a glimpse into the overall equipment finance industry, and this year both attendance and energy were high. Our experience at Key Equipment Finance is also in sync with the survey results that show increasing confidence in the market. We’ve seen a recent increase in new business activity, and I join the ranks of those who are cautiously optimistic about the state of the industry.”
When asked to assess if their current business conditions would remain the same in the next four months, 38% of executives responding said they believe business conditions will improve, an improvement from 26.8% in October. No respondents believe conditions will get worse (compared with 7.3% in October), and 61.9% believe business conditions will remain the same in the next four months, down from 65.9% in October.
43% of survey respondents, up from 34% in October, believe demand for leases and loans to fund capital expenditures (capex) will increase, while 55%, down from 61%, in October, believe demand will “remain the same” during the same four-month time period. 2.4% believe demand will decrease, a drop from 4.9% in October.
64.3% of survey respondents indicate they expect the “same” access to capital to fund business, a significant decrease from 78% in October. 35.7% of executives expect more access to capital to fund equipment acquisitions, up from 22% in October. No one expects “less” access to capital, an improvement from 4.7% last month.
When asked, 40.5% of the executives reported they expect to hire more employees, up from 22% in October, and 47.6% expect no change in headcount in the next four months, while 12% expect fewer employees, up from 7.3% in October.
100% of the leadership still evaluate the current U.S. economy as “poor” or “fair,” at 33.3% and 66.7%, respectively.
40.5% of survey respondents believe that U.S. economic conditions will get “better” in the next six months, an improvement from 17% in October. 59.5% said they believe the U.S. economy will “stay the same” in the next six months, down from 75.6% in October. No one responded they believe economic conditions in the U.S. will worsen over the next six months, down from 7% who believed so in October.
In November, 45.2% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 36.6% in October. 54.8% believe there will be “no change” in business development spending, down from 63% last month.
Survey results are posted on the Foundation website, http://www.leasefoundation.org/IndRsrcs/MCI/. Survey respondent demographics and additional information about the MCI are also available at the link above.

High-speed rail service at speeds rivaling trains in Europe and Asia?

U.S. Awards $2.4 Billion for Passenger-Rail Projects  By JOSH MITCHELL

WASHINGTON—The Obama administration Thursday awarded $2.4 billion in grants to advance passenger-rail projects in 23 states, amid election-season criticism from some Republicans that the projects are too costly.
More than a third of the money, about $901 million, will go to California, including $715 million to begin building high-speed rail lines in the Central Valley between Los Angeles and San Francisco. Florida will get $800 million for new intercity routes there.
The rest of the $2.4 billion pot, funded largely by this year's budget, will pay for upgrades to existing routes in the Midwest, Northeast and other areas to relieve congestion on freight railroads.
The Obama administration's goal for the new California and Florida routes is eventually to offer high-speed rail service at speeds rivaling trains in Europe and Asia. The corridors would connect Sacramento and San Diego in California, and Orlando, Tampa and Miami in Florida. The projects have already received stimulus funds, and construction is expected to start in the next two years.
Iowa was awarded $230 million for upgrades that will allow passenger-rail service through Iowa City, Chicago and the Quad Cities. Michigan will get $161 million for service between Detroit and Chicago.
The administration earlier this year awarded $8 billion in stimulus money for dozens of passenger-rail projects.
Transportation Secretary Ray LaHood Thursday highlighted the jobs the rail projects could create, and compared the effort to modernize the national rail network to the construction of the interstate highway system under the Eisenhower administration.
Critics of the administration's rail program say the projects could leave states on the hook for millions and possibly billions of dollars in construction and operating costs at a time when they are struggling to balance budgets.
The funding announced Thursday requires that states cover 20% of the cost of a project receiving funds. Very few passenger-rail systems break even, so states could be asked to cover operating losses, as the government already does for Amtrak.
New Jersey's Republican Gov. Chris Christie this week halted a $9 billion project to build a rail tunnel under the Hudson River, saying the project would saddle the state with unsustainable costs. Republican candidates in California, Ohio and Wisconsin also have criticized the administration's high-speed rail projects in their campaigns.