The global leasing market is expected to grow from $1.35 trillion (£1 trillion) in 2021 to $1.53 trillion (£1.13 trillion) in 2022 at a compound annual growth rate (CAGR) of 12.9%, according to a London-based business intelligence firm, The Business Research Company (TBRC).
This growth is mainly due to companies rearranging their operations and recovering from the impact of Covid-19, which earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges.
The leasing market is expected to reach $2.4 trillion (£1.77 trillion) in 2026 at a CAGR of 12%, TBRC said.
TBRC’s leasing market report is segmented by type into automotive equipment leasing, consumer goods and general rental centres, machinery leasing, and lessors of nonfinancial intangible assets.
Lessors of nonfinancial intangible assets are the largest segment of the leasing market by type, accounting for 36.6% of the total market in 2021.
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The automotive equipment leasing market is expected to be the fastest-growing segment, growing at a CAGR of 14.7% during the 2021-2026 period.
Shift toward rentals
The survey found that the cyclical nature of the various industries such as construction, mining, and agriculture; the benefits of renting or leasing equipment increasing seem to outweigh the benefits of ownership.
Many contractors, construction companies, and a wide variety of industries are exploring rental options over purchasing of new machinery due to the impact of Covid-19 on companies’ economic activities which has increased companies’ interests in cutting costs and is accompanied by a rise in the expansion plans among smaller companies, the report found.
The global leasing market is highly fragmented, with a large number of regional players operating in the market. The top ten players in the market made up 7.99% of the total market in 2021.