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February 10, 2014updated 12 Apr 2017 3:59pm

FLA reports 34% rise in asset finance business in December

The UK asset finance markets rose by 34% in December 2013 to £2.2bn (€2.86bn), led by a resurgent commercial vehicle sector which posted one of its strongest ever rises, according to data from the Finance and Leasing Association.

By Mike Cobb

The UK asset finance markets rose by 34% in December 2013 to £2.2bn (€2.86bn), led by a resurgent commercial vehicle sector which posted one of its strongest ever rises, according to data from the Finance and Leasing Association (FLA).

December’s new business was nearly 10% of the total for 2013 which came in at £22.3bn when large ticket items were included and £21.7bn without.

Part of the driving force for the rising numbers in commercial vehicles was the introduction of the Euro 6 regulation for trucks, which has prompted many freight fleets to upgrade to compliant vehicles. For the full year the commercial vehicle market rose to £5.2bn in new finance written, an increase of 8% on the previous year.

Other sectors performed strongly too, however. In a positive sign for the UK economy, new plant finance increased 25% in December and 4% in the year. This equated to £385m and £4.47bn respectively.

IT equipment’s strong growth during 2013 continued into December, with a jump of over 28% on the December 2012 to £257m. Total year figures were the also the healthiest of any sector, up 14% year-on-year to £1.54bn.

Geraldine Kelly, head of research and chief economist at the FLA said: "The asset finance market reported its highest level of new business for three years in December, suggesting the long-awaited recovery in business investment may well have begun.

"The recovery in the UK economy so far has been driven by the services sector and supported by almost £15 billion of asset finance provided to businesses in that sector last year."

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