Confidence in short-term prospects for the UK economy has plummeted among leasing companies over the past three months, although they are more confident that the equipment finance market will improve, a new survey has found.
Only 1% of UK leasing companies questioned by the Finance & Leasing Association (FLA) thought that the UK economy would improve slightly in the short term, compared to 68% who thought so in the previous quarter.
Despite the increased pessimism about prospects for the general economy, leasing companies were more optimistic about the future of some parts of the leasing market.
Nearly half (47%) of respondents expected the equipment finance market to improve in the next three months, compared to 21% in the previous quarter.
The increased confidence is borne out by growth in the UK leasing market, FLA figures also show.
Asset finance deals of up to £20 million grew 7% in the second quarter of this year compared with the year-earlier period, the FLA also found. Growth was particularly strong in commercial vehicle finance (21%), general business equipment finance (16%) and also plant and machinery sector (10%).
The biggest drops in leasing business were in aircraft, ships and rolling stock (-34%) and IT equipment (-8%).
George Lynn, chief financial officer at Angel Trains and chairman of the FLA’s Asset Finance Division, said: “While several recent economic indicators have suggested low levels of business confidence, our recent survey of expectations in the asset finance market shows cautious optimism, which is supported by the continued growth in today’s Q2 figures.”
The survey questioned 33 leasing companies who accounted for 76% of leasing new business in 2010.