According to the Equipment Leasing & Finance Foundation’s July 2016 Monthly Confidence Index for the Equipment Finance Industry, confidence in the equipment finance market is 52.5, remaining steady with the June index of 52.3.

When asked about the outlook for the future, survey respondent Anthony Cracchiolo, president and CEO of U.S. Bank Equipment Finance, said, “The industry continues to be stable and positioned for growth as the U.S. economy improves. However, challenges remain as the expansion remains slow and as low interest rates continue to apply pressure to the industry’s bottom line.”

When asked to assess their business conditions over the next four months, 12.1% of executives said they believe business conditions will improve over the next four months, an increase from 9.4% in June. That coincides with the 12.1% who believe business conditions will get worse, a decrease from 21.9% the previous month.

Optimism about demand also increased, with 12.1% of survey respondents expecting demand for leases and loans to fund capital expenditures (capex) to increase over the next four months, a jump from 6.3% in June. However, 30.3% believe demand will decline, an increase from 21.9% who believed so in June.

“Current events here and abroad make us concerned about demand for the next two quarters. Application volume has remained steady but not strong, and credit approval percentages are decreasing slightly,” said Valerie Hayes Jester, president of Brandywine Capital Associates. “I think our average customer will wait for the outcome of the election before making decisions to expand their business or replace equipment that may be ready for an upgrade. Uncertainty seems to plague us.”

There was little change in the number of executives who expect more access to capital to fund equipment acquisitions (15.2%) compared to June (15.6%), although there the number of respondents who expect less access capital rose to 6.1% from 3.1%.

“The political and economic environments will continue to create uncertainly for the foreseeable future,” said Thomas Jaschik, president of BB&T Equipment Finance. “As such, investment in capital equipment will continue to be erratic. I would expect a bumpy ride for the equipment finance industry for the remainder of 2016.”

When asked, 30.3% of executives report they expect to hire more employees over the next four months, a decrease from 37.5% in June.

There was a consensus among responding executives when it came to the U.S. economy, with 100% of respondents evaluating current conditions as fair.

However, the outlook going forward is slightly negative, with only 3.0% of the survey respondents anticipating that U.S. economic conditions will get better over the next six months, a decrease from 6.5% in June. With that said, most respondents (78.8%) said they believe the U.S. economy will stay the same over the next six months, an increase from 75.0% the previous month.

“There is definitely uncertainty given the international effects that Brexit has had on exchange and bond rates,” said William H. Besgen, senior advisor and vice chairman emeritus of Hitachi Capital America. “The question is how it will affect the U.S. market, which continues to plow ahead, albeit at a slow pace.”

In July, 36.4% of respondents indicated that they believe their company will increase spending on business development activities during the next six months, an increase from 31.3% in June. A few executives (3.0%) believe there will be a decrease in spending, which is a slight bump from June when no respondents expressed such a sentiment.