• March is a bumper month for UK leasing, witnessing a 29% increase in new lease inceptions on this time last year and an 8% rise on pre-pandemic volumes
• Suggests business confidence high enough to invest in essential equipment – in the face of a multitude of growing macroeconomic, social and political crises
In the face of significant macroeconomic issues that look set to dent business confidence in the UK, the Acquis Index for Q1 2022 reveals that businesses are leasing significantly more essential items at the end of the period compared with this time last year.
The latest Acquis Index – an economic indicator of how much equipment UK companies lease – says that the proportion of new contracts signed by UK companies to lease essential items:
• is 29% higher than March 2021, when the UK had been battered by the pandemic and was entering the third month of its third national lockdown, and
• 8% ahead of the equivalent point in 2020, when the impact of the pandemic was yet to fully hit
Looking at the data in a different way – by comparing pre-pandemic performance during Q1 2020 with current performance two years later in Q1 2022 – we can see that the recovery in the UK leapt ahead of Europe with volumes for the entire quarter tracking ahead of where they were before the pandemic hit, for the first time since the pandemic began, while in Europe volumes were over 20% down on pre-pandemic performance.
Leasing is the bedrock of multiple economic sectors – from construction to healthcare – and to better understand where the impact of the last few years has hit deepest, the index takes a deeper look at three: restaurant and retail, companies that lease computer equipment, and those leasing office equipment.
Here the Acquis Index shows three notable trends that mirror other economic indicators:
• Restaurant and retail: one of the sectors hit hardest by the pandemic with enforced closures during lockdown, nevertheless this sector has seen fairly consistent growth finishing Quarter 1 2022 almost on par with pre-Covid levels for new lease agreements.
• Computer equipment: after recovering well during 2020 following the initial impact of the pandemic, likely to have been helped by the rise in mobile working, this sector has continued to falter and finished Q1 2022 languishing over 30% below pre-pandemic volumes, a sign perhaps that supply chain issues continue to hamper sector performance
• Office equipment: has demonstrated steady quarter-on-quarter growth since the impact of the pandemic hit in Q2 2020, and is now at near-parity with pre-pandemic volumes. These figures will be encouraging for a sector hit by many businesses downsizing office space and moving to hybrid working, but with a return to office now on the agenda for many the demand has proved consistent
James Rudolf, Chief Commercial Officer, Acquis Insurance, says: “Clearly the broader economic outlook is a worry. Will the impact of war on the edge of Europe spread closer to home? Will the UK cost of living crisis, rising interest rates and the threat of recession dent business confidence? Our index is a leading indicator and it’s hard to see statistical evidence that lessors have had to worry yet. However, time will tell, and 2022 still has time to deliver a turbulent future.
“The big data sets covering corporate equipment leasing tell us that businesses are resilient and – for example with more than a quarter more leases signed in the March of this year compared with two years ago – UK companies are using leasing as a reliable tool to help them weather economic storms.”