Total asset finance new business (primarily leasing and hire purchase) fell in February 2022 by 2% compared with the same month in 2021, according to new figures released by the Finance & Leasing Association (FLA).

In the first two months of 2022, new business was 5% higher than in the same period in 2021.

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The business equipment finance sector reported new business up by 17% in February compared with the same month in 2021. By contrast, the plant and machinery finance and commercial vehicle finance sectors reported falls in new business of 1% and 4% respectively, over the same period.

Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “The asset finance market continues to be adversely affected by the disruption to equipment supply caused by the pandemic and the invasion of Ukraine. Nevertheless, some sectors reported double-digit growth in February including asset finance new business provided to SMEs which increased by 10% and for construction equipment which grew by 21%.

“The near-term economic outlook has become more difficult for businesses facing higher costs across the board, but we continue to expect business investment to recover as the year progresses. The asset finance market will play a vital role in supporting businesses of all sizes to invest as they embrace digitalization and work towards meeting net-zero targets.”

Meanwhile, the FLA reported that the consumer car finance new business volumes were up in February 2022 by 24% compared with the same month in 2021. The corresponding value of new business grew by 39% over the same period. In the first two months of 2022, new business volumes were 34% higher than in the same period in 2021.

The consumer new car finance market reported new business up 15% by value and 9% by volume in February compared with the same month in 2021. In the first two months of 2022, new business volumes in this market were 30% higher than in the same period in 2021. The percentage of private new car sales financed by FLA members in the twelve months to February 2022 was 90.8%.

UK asset finance market grew by 11% in January: FLA