A collapse in investments and the legislator have a retarding effect on leasing - 23% less new business in 2009

The recession has fully impacted the leasing sector, as the latest Ifo Investment Survey of German leasing companies shows. In 2008 total new business in leasing decreased by 1.1%, and leasing's share of total investments (excluding housing) declined from 17.0% to 16.1%. New business in movable capital assets plunged in the period from January to September alone by ca. 30 percent vis-à-vis the comparable previous-year period. On average for the year, business losses in leasing will amount to almost 23%, with mobile leasing shrinking by 23% and immovable leasing by around 22%. According to the autumn forecast of the institutes for total investment in the economy, which assumed a nominal decline of 13% for 2009, this means that the leasing ratio will fall from 16.1% to 14.4% in 2009. Although the current investment cycle bottomed out in 2009, the prospects of a quick revival in investment spending are slight. The recessionary evolution of investments could last even longer. The Ifo/BDL investment indicator points to further declines in plant and equipment spending through the greater part of 2010.