11 Year High for Asset Finance
While the Office for National Statistics reports a 0.1% contraction in the UK economy
Bearing in mind that the last two quarters showed decline, the situation part way through the third quarter has raised further concerns from some commentators that the UK is sliding into recession.
The ONS has also reported a 0.5% productivity fall in services and manufacturing from April-June 2019. The fall follows two consecutive quarters of zero growth.
But despite the economic indicators, the Bank of England and other economists have been more upbeat about Q3 and are still anticipating modest growth for the quarter overall.
Brexit and no-deal expectations are widely reported as the most significant threats to the economy, and that recessionary fears won’t abate until there is some certainty.
Whilst GDP growth is in doubt, the Finance and Leasing Association (FLA) has reported that August’s performance in the asset finance market was steady, and that year to date growth still sits at 6%.
Asset Finance Performance
The FLA figures evidence a robust performance in 2019 for asset finance with 7% growth in 2019 (January to August). Machinery, equipment and software finance saw asset finance funding 41% of the acquisitions in Q2 2019, which is an eleven-year high.
The motor industry continues to face significant challenges and car finance through the FLA is showing a 2% year on year decline. But even this hard-pressed industry is recording some positives too. On the commercial vehicle funding front, 14% growth in asset finance has been reported.
Other robust sectors include aircraft, ships and rolling stock which collectively accounted for a 115% increase against August 2018.
Asset Finance with Maxxia
Maxxia offers a wide range of types of finance including contract hire, contract purchase, hire purchase, operating lease and for a wide range of assets including cars, vans, commercial vehicles, equipment, plant and machinery and IT.