UK businesses are investing more in IT and technology than anything else as they seek to drive efficiency.
This July, UK Finance & Leasing Association (FLA) members report that IT equipment finance grew by 37% compared with July 2014, while commercial vehicle finance and business equipment finance grew by 12% and 3% respectively over the same period.
In the 12 months to July 2015 IT equipment finance grew by a significant 35% to reach a total of £1.9 billion.
| Jul 2015 |
% change on prev. year |
3 mths to Jul 2015 |
% change on prev. year |
12 mths to Jul 2015 |
% change on prev. year |
|
|---|---|---|---|---|---|---|
| Total FLA asset finance (£m) | 2,448 | +2 | 7,303 | +10 | 28,199 | +15 |
| Total excluding high value (£m) | 2,400 | +4 | 7,154 | +10 | 27,190 | +14 |
| Data Extracts: | ||||||
| By asset: | ||||||
| Plant and machinery finance (£m) | 523 | 0 | 1,535 | +5 | 5,719 | +14 |
| Commercial vehicle finance (£m) | 542 | +12 | 1,617 | +9 | 6,437 | +9 |
| IT equipment finance (£m) | 162 | +37 | 552 | +35 | 1,993 | +35 |
| Business equipment finance (£m) | 194 | +3 | 510 | -13 | 2,168 | +7 |
| Car finance (£m) | 788 | -4 | 2,403 | +15 | 8,803 | +17 |
| Aircraft, ships and rolling stock finance (£m) | 20 | +1 | 40 | -37 | 447 | +68 |
A recent survey by Lombard reveals that of businesses which have invested in assets in the last year, nearly seven in 10 (69%) have spent on IT and technology.
The study shows that over two-thirds of all respondents think their business could benefit from innovation in technology and believe that improved technology would increase efficiency (62%) and help them become more competitive (45%).
And 78% of survey respondents are keen for the UK government to do more to support them in encouraging ongoing investment in new technology.
When looking at motivations for investment as a whole, a desire for efficiency was once again prominent, as 80% of businesses listed it as a reason for them investing. Other notable factors were a wish to increase turnover/profit (84%) and to keep up with the competition (83%).
Half of businesses (50%) said they were investing to secure future growth, with a further 27% investing to replace ageing equipment. Only 10% are not investing and have no plans to do so in the future.
The research also reveals that confidence in the UK economy is growing, with 67% of UK businesses saying they are more confident than they were 12 months ago.
Commenting on the survey results, LTS managing director, Duane Snelling, said: It’s clear that UK businesses have an appetite to invest in line with increased levels of confidence in the economy.
“IT and technology are the key areas of investment, which demonstrates a desire among firms to boost efficiency levels and stay one step ahead of their competitors.
“Businesses wishing to invest can do so in a variety of ways and at LTS we’re seeing increasing numbers of firms using asset finance as a means to acquire the technology they need.”
