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FLA figures show growing business investment in new equipment

FLA figures show growing business investment in new equipment

Released on 12 April 2012

Growth in all business equipment finance sectors in February is a sign that businesses are gaining the confidence to invest.

New figures from the Finance & Leasing Association show that commercial vehicle finance, IT equipment and plant and machinery finance all grew by more than 20% when compared with February 2011. Car finance and business equipment finance grew by 2% and 5% respectively, compared to 2011.

The figures reflect an upward trend in the use of asset finance. In the last 12 months, asset finance provided £21.2 billion for businesses investing in equipment and in 2011 asset finance helped fund 27% of all fixed-capital investment1 in the UK.

Geraldine Kilkelly, Chief Economist and Head of Research at the Finance & Leasing Association, commented:

“The figures show that February was another strong month, with businesses turning to asset finance to fund investment in new and replacement business equipment. Plant and machinery, IT equipment and commercial vehicles were especially strong, which is a good sign for the economy.

“For some businesses asset finance helps them to replace ageing equipment, while for others it helps them to expand and grow. Whatever the reasons, asset finance plays an important role in funding business investment and in contributing to the economic recovery.”

 

Table 1: Total asset finance business, and extracts of breakdown by asset class

 

 

 

Feb  2012

% change on Feb 2011

3 months to Feb 2012

% change on prev. year

 12 months to Feb 2012

% change on prev. year

Business equipment finance (£m)

201

+5

548

+3

2,045

+10

Car finance (£m)

360

+2

1,315

+13

6,361

+5

IT equipment finance (£m)

83

+27

383

+34

1,161

+8

Plant and machinery finance (£m)

334

+27

1,033

+29

3,994

+16

Commercial vehicle finance (£m)

417

+22

1,175

+21

4,494

+21

Aircraft, ships and rolling stock finance (£m)

63

+163

115

-42

550

-30

Total excl. high value (£m) 

1,488

+17

4,874 

 +18

 20,061 

+11

Total FLA asset finance (£m)

1,639

+10

5,225

-1

21,192

+2

- ends - 

Note to editors:

  1. Excluding property and own-account software.
  2. In 2011, FLA members provided £72.9 billion of new finance to UK businesses and households. £20.8 billion of finance was provided to businesses and the public sector, representing around a quarter of all fixed capital investment (excluding real property and own-account software) in the UK last year. 

For further media information, please contact:

Helen Saxon, FLA

T: 020 7420 9664 E: helen.saxon@fla.org.uk M: 07918 766 993