James Rudolf, Chief Commercial Officer, Acquis comments on the latest asset finance figures from the Finance and Leasing Association (FLA):

“The December 2023 figures from the FLA show that asset finance new business fell for the first time since April 2022. Some areas felt this more than others and in particular, it was machinery and equipment which saw overall new business levels drop, compared with the previous year.

These numbers will have been impacted by increases in inflation and borrowing costs during 2023, and while some challenges are easing with inflation dropping to 4% in December 2023, compared to 10.5% the year before, and a strengthened labour market, several major macroeconomic factors will persist. This will cause worry for many businesses throughout the year so an element of fluctuation will remain in 2024.

“Our own Acquis Index, which looks at new business asset finance across 2023, also revealed that, despite a bleak outlook at the beginning of the year, the asset finance industry remained static. However, on closer inspection of the numbers, the Index reveals that only a handful of asset classes performed better in 2023 than in 2022, one example being building and construction which demonstrated a 5% growth in annual value of lease inceptions.

“It also shows that restaurant and retail equipment experienced a drop in annual values of new leases of 7% on 2022, however these numbers should be viewed with caution as they could reflect the industry normalising in a post-pandemic world, following an exceptional increase in 2022.

“To improve the outlook for 2024, we need Government strategies to promote business investment and restore investor confidence, but with a General Election on the cards, this may not come to fruition in the short term, but the continued resilience and ingenuity demonstrated by our client partners in the asset finance sector will mean that once again the performance of the industry will defy predictions.”