Leasing production back to pre-corona levels

Leasing companies in Belgium report significant growth in new leasing contracts across almost all categories of capital goods, including machinery, all types of rolling equipment, and buildings.

The growth would have been even more substantial if machine producers and suppliers had not been impacted by the global chip shortage.

The total investment value of new leasing contracts during the first 9 months of 2021 amounted to 4.7 billion euros. This represents an increase of over 14% compared to the same period in 2020 and reaches the pre-COVID-19 level of 2019.

As of the end of September 2021, the total outstanding volume of leasing contracts amounted to 17.6 billion euros.

In the second quarter of 2020, the leasing sector experienced a 25% decline in its activity due to the lockdown. This decline was only partially compensated for in the second half of 2020. Currently, as many cars, vans, forklifts, packaging machines, servers, production machines, etc., are being leased as before the COVID-19 crisis.

Leasing serves as a barometer of the real economy because it provides insight into the financing of production assets necessary for the day-to-day operations of our businesses.

Solar panels and CHP (Combined Heat and Power) installations are also leased, as well as electric cars, electric cranes, and earthmoving equipment. Leasing already plays a role in financing the investments associated with the major energy transition and is a very accessible and transparent financing method to achieve the greening of our vehicle and machinery fleet.

The growth in the leasing sector would have been even greater without the global chip shortage. Due to this scarcity, new vehicles and machinery are often delivered later, with some deliveries not expected until 2023. Since there is less new equipment available, there is a shortage in the second-hand market, resulting in price increases.

Expectations are that this will level out in the course of next year. Once the deliveries of goods pick up speed again, this will provide an additional boost to leasing activity.

Leasing also plays a significant role in the transition from a linear to a circular economy. Circular business models often involve a shift from owning a product to using it. Leasing can be a particularly suitable financing tool in this context.

It is expected that leasing will continue to have an increasingly prominent place in the ideal financing mix for businesses in the future.