The Q1 2021 Industry Outlook Survey results released by the Finance & Leasing Association (FLA) show that the asset finance industry sees opportunities for growth over the next year despite the heightened uncertainty caused by the latest restrictions to deal with the Covid-19 pandemic.
Respondents were divided on the outlook for economic conditions, with 52% expecting some improvement over the next 12 months, while 44% expected conditions to worsen.
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However, if the latest UK-wide lockdown and the vaccine rollout are successful in bringing the Covid-19 crisis under control, the majority of respondents expected growth over the next twelve months – almost 70% of respondents expected some increase in new business over that period, with 37% expecting new business to increase by 10% or more.
Respondents also saw opportunities in developing and improving online offers and the digitalisation of processes more generally. For example, we have seen finance providers scale-up click and collect services over the past year. The strength of used car demand and residual values within this market are expected to provide opportunities for new business growth in the consumer car finance market during 2021.
The majority of respondents expect no change in the availability of funding over the next three or twelve months – 84% and 77% respectively. Just over half of respondents (51%) expected the cost of funding to remain stable over the next year, while a third of respondents expected some increase in funding costs.
Commenting on the survey results, Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The results of the Q1 2021 survey reflect the industry’s concerns about the adverse impact of prolonged uncertainty on businesses and households.
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By GlobalData“But the results also point to the underlying pre-crisis strength of FLA members which has helped them weather the pandemic so far. The specialist knowledge of finance providers means the industry is in an ideal position to help drive forward Government initiatives such as levelling-up and net-zero.”
FLA survey findings
