As countries begin to adjust to the impact of the coronavirus across Europe and adapt to a ‘new normal’, the Acquis Index shares some of the trends we are witnessing in equipment leasing volumes that may prove a useful indicator for trends in the wider leasing industry.
As an independent insurance administrator working in partnership with over 90 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’ 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 computer / office equipment, 15% retail and 12% manufacturing, with the remainder consisting of construction, material handling, medical and other assets.
As we anticipated in the April index, lease originations continued to fall during May, when we saw inception volumes hit 36% of 2020’s Q1 average. However, for Acquis this was a better performance than early predictions originally indicated.
Another ‘better than expected’ trend was, perhaps surprisingly, witnessed in the European restaurant sector where during April lease inceptions for restaurant equipment had fallen to 18% of their first quarter volumes. Yet, during May, we’ve seen some early indications of improvement as lockdown easing begins to take effect across Europe and restaurants embrace new take-out and delivery models, with these European lease inceptions achieving a noticeable increase on April’s volume, whilst we acknowledge the sectors lease volumes are still only at 24% of their Q1 average.
While still falling on Q1 volumes, computer equipment also fared better than average, managing to maintain 49% of Q1’s volumes.
The regional performance variations we witnessed in April, continued in May, with France being one of the hardest hit of our European regions with volumes falling to 23% of where they were in the 1st quarter of 2020, compared with 53% in the Netherlands.
The outlook for June suggests the steep downward trend that we witnessed during the last two months might have already begun to flatten with anticipated volumes stabilising close to May levels.
Acquis’ Chief Commercial Officer, James Rudolf, comments, “In some ways there are no big surprises here; we anticipated that the impact of the Covid-19 pandemic would continue to hit hard during May. But what has been encouraging to see, is that the impact hasn’t been as deep as early views may have indicated and we are already witnessing some small but not insignificant green shoots in some areas. The need continues for the market to understand and respond to SMEs, and support U, V or W shaped recoveries which are likely to differ by sector and region.”