New business volume in US equipment leasing was $5.1bn (€3.8bn) in January, a 21% increase year-on-year and down 53% from the previous month.
The figures come from the latest Monthly Leasing and Finance Index from the Equipment Leasing and Finance Association (ELFA) which said the monthly drop in volumes was down to a typical end-of-year spike in business, reaching $10.8bn in December.
The EFLA data also showed a similar pattern in credit approval which returned to a normal level of 77% after a high of 79% in December. More than 71% of participating organisations reported submitting more transactions for approval during January, down from 77% in December.
William G Sutton, ELFA president and chief executive, said: “January’s increase in new business volume returned to a more typical growth pattern following a very busy end-of-year for many leasing and finance companies.
“The continued strengthening in financing volume and trend toward healthier portfolios provide clear evidence that the equipment finance marketplace is in the midst of regaining some of the momentum lost during the Great Recession.”
Meanwhile, the Monthly Confidence Index of ELFA’s associate body the Equipment Leasing and Finance Foundation (ELFF), increased in February to 59.6, from the January index of 59.
The index shows confidence in the US leasing industry continues incremental recovery after a big drop in mid-2011, with just under a quarter of executives believing business conditions will improve over the next four months.
Looking ahead, 23.5% of respondents said they believe business conditions will improve, a 5.1% increase from the January index. 73.5% of respondents believe business conditions will remain the same, a drop from 76.3% on the previous month, and 2.9% think business conditions will worsen – a decrease from 5.3% in January.
Survey respondent Russell Nelson, president of Farm Credit leasing, said: “Continued signs of economic recovery and modest expansion occurring across an increasing number of industries are driving new and replacement capital expenditures, supported by flat interest rate growth.
“The current outlook would indicate strong growth in loan and lease demand for equipment finance through 2012.”