A sharp drop in European equipment leasing volume during March and April 2020, when Covid-19 hit, was counterbalanced by a positive recovery period during Q3, according to Acquis Insurance Finance.
However, this recovery failed to continue its strong upward trajectory during Q4 when the sector witnessed a levelling off of leasing volumes across the Continent, according to Acquis’ Index of performance indicators for 2020.
The Q4 plateau “was to be expected as the optimism of a return to some form of normality during the late summer months was replaced with trepidation” as many European nations re-entered lockdown amid the pressures of winter in managing the virus, commensurate with the imposition of cross-border restrictions on non-essential travel, Acquis said.
Year-on-year data found that volumes were tracking at around 25% below 2019 for the last few months of the year, according to Acquis.
However, certain leasing sectors, including office and computer equipment, outperformed other areas in recovery as businesses and workforces adapted well to new working environments.
Unsurprisingly, the hard-hit restaurant industry lagged in leasing volume recovery, with many SMEs suffering from the stop-start-stop effect of changing government policy, Acquis said in a statement.
To return confidently to pre-Covid levels a significant boost needs to occur in 2021, and despite vaccination programmes rolling out across Europe, we anticipate that leasing volumes will remain suppressed throughout Q1 of 2021 as the impact of sustained lockdowns in most European territories continues to be felt, the specialist asset finance insurer said.
James Rudolf, chief commercial officer for Acquis, said: “The fact that new lease volumes recovered to around 75% of pre-Covid volumes by the end of the year can be taken as a positive sign of the resilience of the leasing industry.
“Despite heading into winter, when the strain on health resources is always felt harder, the recovery did not lose substantial ground.
“We saw positive activity spikes in both July and October, both months that coincided with the lessening of restrictions and both undisrupted by public holidays.”
“As we look forward to Spring, it remains to be seen what the impact of government coronavirus loan schemes coming to an end will be on businesses, but we are optimistic that businesses who were in a healthy position before the pandemic will come out the other side perhaps leaner but more resilient.”
Acquis Insurance Management is an independent insurance administrator working in partnership with over 90 leasing companies across 13 European countries and has been providing specialist insurance programmes for equipment leasing for over a decade.
Acquis’ volumes are predominantly made up of small-ticket equipment with an average ticket size of €12,000. 58 per cent of the volumes are made up of IT / office equipment, 15 per cent retail and 12 per cent manufacturing, with the remainder consisting of construction, material handling, medical and other assets.