New business volume in October rose 2% year-over-year from that in October of last year, though it was down 3% month-to-month from that in September. According to the Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index, which covers economic activity from 25 companies who represent a portion of the $1 trillion equipment finance sector, cumulative new business volume was up 4% compared to 2016, year to date.
“Equipment finance originations continue to grow, albeit slowly, as some sluggish market verticals show signs of rebounding,” said ELFA President and CEO Ralph Petta in a release. “This trend, coupled with buoyed confidence in overall economic conditions, paves the way for a very healthy end-of-year bump.”
Credit approvals clocked in at 74.6% for October, up from 74% in September. Head count for equipment finance companies was up 17.1% year-over-year, though this is attributable mostly to one company in the survey. Participants in the index include Bank of America Merrill Lynch, BB&T Bank, CIT, Hitachi Credit America, M&T Bank, Merchants Bank Equipment Finance, TD Equipment Finance, Volvo Financial Services and Wells Fargo Equipment Finance.
Receivables over 30 days were 1.4%, the same as in September and unchanged from the same time frame last year. Charge-offs were 0.41%, only a slight rise from the previous month. The separate Equipment Leasing & Finance Foundation’s Monthly Confidence Index registered 67 in November, up from 63.7 in October.
“Business confidence is very strong and building, despite the relatively flat growth of originations,” said David C. Mirsky, CEO of Pacific Rim Capital, in the release. “This is because lessors are feeling mounting strength in the overall economy, evidenced by increasing requests for quotations and new orders being placed by lessees in every market segment.”
The hurricanes that occurred earlier in the year have had an effect on the economy, as shown by recent numbers from the “index of indices.” “The Conference Board’s index of leading economic indicators rose slightly more than expected as the economy shrugged off the impact of the hurricanes,” said NACM Economist Chris Kuehl, Ph.D. “It wasn’t so much that the storm damage was ignored—more that the storm aftermath took over as far as the economy is concerned. The initial damage was not quite as severe as had been expected (at least at a national level), but the reconstruction has been swift and has boosted several areas of the economy. The expectation had been a 0.9% boost; the actual improvement was 1.2%, to a total of 130.4.”
– Adam Fusco, associate editor