The Acquis Index shares the trends that Acquis is witnessing in equipment leasing volumes which may prove a useful indicator for emerging trends in the wider leasing industry.
At the start of a new year, the picture that has emerged of the impact of the pandemic on leasing volumes during 2020 is now clear. The sharp depression in volumes experienced when the coronavirus hit in March and April last year, was followed by a positive recovery period during Q3. However, this recovery failed to continue its strong upward trajectory during Q4 when we witnessed lease inception volumes across Europe levelling off. This was largely to be expected as the optimism of a return to some form of normality during the late summer months was replaced with trepidation as European nations braced to withstand the additional pressures that winter would bring in managing the virus.
A look at year-on-year data reveals that volumes were tracking at around 25% below 2019 for the last few months of the year. Still, certain sectors of leasing, including office and computer equipment, outperformed other areas in recovery as businesses and workforces adapted well to new working environments. It’s unsurprising that the hard-hit restaurant industry lagged behind in leasing volume recovery with many SMEs suffering from the stop-start-stop effect of changing government policy.
In order to return confidently to pre-Covid levels a significant boost needs to occur in 2021, and despite vaccination programmes rolling out across Europe, we anticipate that lease inception volumes will remain supressed throughout Q1 of 2021 as the impact of sustained lockdowns in most European territories continues to be felt.
Acquis’ Chief Commercial Officer, James Rudolf, comments, “The fact that new lease volumes recovered to around 75% of pre-Covid volumes by the end of the year can be taken as a positive sign of the resilience of the leasing industry. Despite heading into winter, when the strain on health resources is always felt harder, the recovery did not lose substantial ground. We saw positive activity spikes in both July and October, both months that coincided with lessoning of restrictions and both undisrupted by public holidays. As we look forward to Spring, it remains to be seen what the impact of government coronavirus loan schemes coming to an end will be on businesses, but we are optimistic that businesses who were in a healthy position before the pandemic will come out the other side perhaps leaner but more resilient.”
ABOUT THE INDEX: As an independent insurance administrator working in partnership with over 100 leasing companies across 13 European countries, Acquis has been providing specialist insurance programmes for equipment leasing for over a decade, and during the course of this time our management data has proved to be a reliable early indicator of changes in new business volumes across the leasing industry.
Acquis’ own volumes are predominantly made up of small ticket equipment with an average ticket size of €12,000. 58% of the volumes are made up of IT / office equipment, 15% retail and 12% manufacturing, with the remainder consisting of construction, material handling, medical and other assets.