European leasing trade association Leaseurope and leasing consultancy Invigors have published the results of the Leaseurope/Invigors European Business Confidence Survey, conducted in December 2017.
The December findings show a positive outlook for the European leasing business for the first half of 2018, encouraged by robust growth prospects for the European economy.
New business volumes in the first half of 2018 remain positive in line with previous Leaseurope research, with 80% of those surveyed expecting new business volumes to increase, while just 5% anticipate a decline.
Respondents’ expectations on the level of bad debt are mostly stable, with over 60% of participants forecasting that bad debt will remain unchanged over the coming 6 months while 22% anticipate a decrease.
In terms of competitive pressures, 29% expect margins will decrease in their organisations, the same level as in the previous survey, while over half (52%) anticipate no change.
65% of respondents anticipate that net profit in their organisations will increase over the next six months, while only 17% believe that this will fall.
The latest survey suggests there is a growing balance of opinion anticipating the emergence of new competition. 41% of those surveyed thought that competition from new entrants was more likely over the next six months, up from 34% recorded last June.
39% expect merger and acquisition activity to increase in the first half of 2018, compared to the 19% recorded in the previous survey.
Industry expectations on a number of other key indicators covering service levels and staffing show little change for first six months of 2018, though there are indications that expenditure on training and systems is anticipated to increase in several organisations represented in the survey.
Invigors EMEA Partner Richard Ryan said, “This latest Business Confidence Survey suggests that the European leasing industry should enjoy a good start to 2018. Growth in new business continues to remain strong, while expectations of most of the other KPIs support an overall positive trend.
“Sentiment on the outlook for the European leasing market in 2018 appears to be increasingly optimistic, driven by sustained economic growth and investment, combined with continued access to liquidity.”