The German leasing industry will struggle next year despite the record €64.2bn (£54.9bn) of new business reached in 2016, according to the Federal Association of German Leasing Companies (BDL).

New leasing business in Germany rose by 9% to reach the record level of €64.2bn, with €55.1bn of equipment leasing making up the majority.

The share of leasing among externally-funded investments in Germany continued its rise above 50% in 2016, while its general penetration rate increased to 16.2%.

Martin Mudersbach, president of the BDL, said: “Leasing is growing at a significantly more dynamic rate than the overall economy, and has demonstrated its importance as a driver of investment in Germany.

“Leasing creates flexibility, and…the services provided by leasing companies take pressure off the lessee’s own resources.”

However, despite the record results, Mudersbach delivered a gloomy outlook for the German leasing market in 2017, citing the outcome of the US presidential election and low interest rates as contributing factors.

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By GlobalData

Mudersbach said: “The outlook for economic growth and the safeguarding of business location is not good.

“Persistently low interest rates have imposed considerable burdens on leasing companies as regards to their income and cost situations.”