Leasing and Renting surpass 165 billion euros and Factoring breaks new records in Europe in the first half of 2022
Leasing and Renting, and Factoring in European countries closed the first half with growth of 5.9% and 21.2%, respectively. In an environment of major disruptions in the business environment and with the inflation rate hitting consecutive record levels since November last year, companies increasingly sought the support of specialized financing.
For factoring, the first half year-on-year growth was an all-time record in the accumulated performance from January to June, according to data from the European sector federation, EU Federation for Factoring and Commercial Finance (EUF), of which the Portuguese Association of Leasing, Factoring and Renting (ALF) is a member.
Portugal not only followed the trend in Factoring, but outperformed it, registering an expressive growth of 27.1% compared to the previous year. This specialized financing product already ensures liquidity in 17.7% of the wealth produced in the country, the third largest share of GDP in Europe, after Belgium and Spain. In global analyses, whether at the level of Europe as a whole, or limited to European Union (EU) partners, Portugal stands out among those where there is a greater discrepancy between the half-yearly increase in factoring and GDP growth over the same period.
While the EU had a nominal GDP growth of 10.2% and a factoring penetration of 12.5%, and Europe as a whole had a product growth of 9.2%, with a GDP penetration of 13.5%, in Portugal the relative demand for factoring was more expressive: 27.1% year-on-year growth, a GDP increase of 12% and factoring penetration in GDP rising to 17.7%.
Adding up the different portions of the continent's countries, the value of payments assured by Factoring in the semester exceeded a trillion euros (1.14 trillion euros). This amount compares with 953 billion euros in the first half of 2021.
Knowing that European Factoring is worth 1.14 trillion euros and that 83.4% came from European Union countries (with France and Germany together accounting for 34% of the total European volume), the war situation on European soil and inflation - which in June set a new record since the beginning of the incessant rises since November 2021 - cannot be dissociated from the refuge sought by companies in the sector. This is on the list of reasons given by the members of the European federation of the sector, whose reports also point to the high demand in the post-COVID period and the refund of state support as reasons for the record semester of factoring. The confidence in factoring reflects not only the modality of anticipation of payments, but also the complementary services in this product, such as credit risk studies and legal support in managing the negotiated receivables.
LEASING AND RENTING WITH UPS AND DOWNS
Less homogeneous than Factoring, the performance of Leasing and Renting, in Europe, during the first half of 2022 varied between significant increases in the Eastern European countries, and seven countries in decline, including Portugal, with a year-on-year decrease of 4.47%, to 1.43 billion euros. The total Leasing and Renting market amounted to 167 billion euros, 5.92% more than the 158.8 billion euros of the first half of last year, then still struggling with confinements from the COVID-19 pandemic.
Equipment and Vehicle Financial Leasing and Operational Leasing were the brake on the expansionary trend in these sectors, reflecting the loss of new contracts associated with the lack of vehicles in the automobile market, due to production constraints caused by the lack of components. While Real Estate Financial Leasing grew 15.41% (13.33% in Portugal), Equipment and Vehicle Financial Leasing and Operational Leasing did not grow more than 5.57% in Europe as a whole from January to June this year. In Portugal, the disruption in the supply chains resulted in the loss of 10.11% of the amount of leases of vehicles and equipment, closing the semester with 1,023 million euros.
"Once again, specialized financing proves, through the support given to the economy, the solidity of the financial system and the confidence that companies have in it. Just as during the serious subprime crisis at the beginning of the last decade and, in the last two years, during the global paralysis of the economies caused by the COVID-19 pandemic, specialised financing has stood by business owners, particularly in Portugal" explains Luís Augusto, ALF's president.