ryan richard

European leasing companies are predicting new business volumes will increase in the first half of 2018.

Research from Leaseurope, the representative body of the European leasing and automotive rental industry, also reveals that 65% expect net profits to rise, despite signs of an increasingly competitive market.

Businesses provided their outlook for the year in the Leaseurope/Invigors European Business Confidence Survey, which was conducted in December 2017.

It shows that 80% of those surveyed expect new business volumes to increase, while just 5% anticipate a decline.

Respondents’ expectations on the level of bad debt are mostly stable, with more than 60% of participants forecasting that bad debt will remain unchanged over the coming six 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 more than half (52%) anticipate no change.

A total of 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.

In addition, 41% of those surveyed thought that competition from new entrants was more likely over the next six months, up from 34% recorded in June 2017, while 39% expect merger and acquisition activity to increase in the first half of 2018, compared to the 19% recorded in the previous 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.”