Construction Sector Leasing Grows In Popularity
Figures released at the end of 2013 by the Finance & Leasing Association (FLA) show that new business provided to fund investment in construction equipment grew in October by 41% (to £134 million), and by 13% over the last twelve months (to £1.2 billion).
It was also a good month for the commercial vehicle and IT equipment finance sectors, with double digit growth in new business of 13% and 12% respectively.
Overall, the asset finance market reported growth of 4% to £1.9 billion in October for new business deals of up to £20 million. This market has grown each month since April 2013, with new business up in the first ten months of the year by 2% to almost £17.7 billion compared with the same period in 2012.
Commenting, Geraldine Kilkelly, Head of Research and Chief Economist at the FLA said:
“The asset finance industry is in a unique position to support businesses as the recovery takes hold. It funds investment in the key equipment that businesses need if they are to expand to meet stronger domestic demand.
“The FLA’s Q4 2013 Asset Finance Confidence Survey suggests that the industry’s senior executives are cautiously optimistic about economic prospects and market conditions over the next year, with a majority expecting growth of up to 10% in each of the main channels for new business.”
Oct 2013 | % change on Oct 2012 | 3 months to Oct 2013 | % change on prev. year | 12 months to Oct 2013 | % change on prev. year | |
| Total FLA asset finance (£m) | 2,137 | +11 | 5,687 | +3 | 21,667 | -2 |
| Total leasing and hire purchase excluding high value (£m) | 1,926 | +4 | 5,372 | +3 | 21,053 | 0 |
| Data Extracts: | ||||||
| Plant and machinery finance (£m)Of which: Construction equipment finance (£m) | 398 134 | +14 +41 | 1,158 365 | +10 +48% | 4,416 1,209 | +3 +13 |
| Commercial vehicle finance (£m) | 474 | +13 | 1,309 | +10 | 4,795 | +2 |
| IT equipment finance (£m) | 112 | +12 | 338 | +11 | 1,495 | +9 |
| Business equipment finance (£m) | 150 | -3 | 439 | -4 | 1,860 | -7 |
| Car finance (£m) | 627 | -4 | 1,618 | -2 | 6,676 | +1 |
| Aircraft, ships and rolling stock finance (£m) | 3 | -96 | 35 | -83 | 264 | -50 |
- bers provided £80.2 billion of new finance to UK businesses and households. £21.5 billion of finance was provided to businesses and the public sector, representing around 28% of all fixed capital investment (excluding real property and own-account software) in the UK last year.
- The FLA quarterly asset finance confidence survey aims to gauge senior executives’ opinions about the outlook for the UK economy and the asset finance industry. All FLA asset finance senior executives were invited to take part in the survey. The Q4 2013 results are based on responses from 30 member companies, who accounted for 76% of annual new business.
For more information see the FLA website. You can also download the WestWon Guide To Equipment Leasing here.
Leave a Reply
Want to join the discussion?Feel free to contribute!