Economic & Industry Trends12TH April 2011
Robert HulseHead of Direct Professions
Portugal asks for bailout
0
2
4
6
8
10
12
14
Germany US UK France Italy Spain Portugal Ireland Greece
%10 year government bond yields
At at 1/12/10 At 6/4/11 At 11/4/11
Source: FT
Public net borrowing on the rise
0
20
40
60
80
100
120
140
160
180
2009 2010 2011 2012 2013 2014 2015
Government net borrowing forecast (£ billions)
November 2010 forecast March 2011 forecast
Source: Office for Budget Responsibility
Disappointing end to 2010
-8
-6
-4
-2
0
2
4
Q4 05 Q4 06 Q4 07 Q4 08 Q4 09 Q4 10
%Growth in GDP
quarter on previous quarter quarter on same quarter a year earlier
Source: ONS
Business investment recovery on the way?
-50
-40
-30
-20
-10
0
10
20
30
40
50
Q4'05 Q4'06 Q4'07 Q4'08 Q4'09 Q4'10
%
GFCF by sectorGrowth, quarter on same quarter a year earlier
Business Dwellings Government
-30
-20
-10
0
10
20
30
40
50
60
70
Q4'05 Q4'06 Q4'07 Q4'08 Q4'09 Q4'10
%
GFCF by assetGrowth, quarter on same quarter a year earlier
Transport equipment Machinery and equipment Intangibles
Source: ONS
Results of investment intention surveys diverge
-4
-3
-2
-1
0
1
2
3
4
Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11
Scores
Bank of EnglandInvestment intentions over the next 12 months
Manufacturing Services
-40
-20
0
20
40
Q1 '04 Q1 '05 Q1 '06 Q1 '07 Q1 '08 Q1 '09 Q1 '10 Q1 '11
Balance of responses
British Chamber of CommerceInvestment intentions over the next 12 months
Manufacturing Services
Source: Bank of England, British Chamber of Commerce
Consumer trends
-6
-4
-2
0
2
4
6
8
Q4 '90 Q4 '92 Q4 '94 Q4 '96 Q4 '98 Q4 '00 Q4 '02 Q4 '04 Q4 '06 Q4 '08 Q4 '10
Household expenditure% growth
quarter on prev ious quarter quarter on same quarter a year earlier
-2
0
2
4
6
Mar-09 Jul-09 Nov-09 Mar-10 Jul-10 Nov-10 Mar-11
Inflation measures 12 months % change
CPI CPIY Target rate
-50-45-40-35-30-25-20-15-10-505
10
Mar-01 Mar-03 Mar-05 Mar-07 Mar-09 Mar-11
GfK consumer confidence index
-20
-15
-10
-5
0
5
10
15
Mar-09 Sep-09 Mar-10 Sep-10 Mar-11
House prices3 months growth trend (%)
Halifax Nationwide
Source: ONS, GfK
Labour market trends
4
5
6
7
8
9
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Unemployment rate (%)
0
500
1000
1500
2000
Feb-06 Feb-07 Feb-08 Feb-09 Feb-10 Feb-11
000s
Claimant count
0
1
2
3
4
5
6
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
Public and private sector earnings’ growth3 months % change
Public sector earnings Private sector earnings
4
6
8
10
Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13
% Unemployment rate forecasts
Source: ONS, Oxford Economics
Economic Forecasts
-6
-4
-2
0
2
4
Q1'09 Q1'10 Q1'11 Q1'12 Q1'13
% GDPquarter on same quarter a year earlier
-30
-20
-10
0
10
20
Q1'09 Q1'10 Q1'11 Q1'12 Q1'13
%Business investment
quarter on same quarter a year earlier
-5
-4
-3
-2
-1
0
1
2
Q1'09 Q1'10 Q1'11 Q1'12 Q1'13
% Private consumptionquarter on same quarter a year earlier
-2
-1
0
1
2
3
Q1'09 Q1'10 Q1'11 Q1'12 Q1'13
%Government consumption
quarter on same quarter a year earlier
Source: Oxford Economics
Bank rate forecasts
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Forecast of Bank rate in Q4 2011
Source: HM Treasury. Forecasts for the UK economy, a comparison of independent forecasts , No.287
Business net lending continues to contract
-10
-5
0
5
10
15
20
Feb-01 Feb-03 Feb-05 Feb-07 Feb-09 Feb-11
%
M4 Lending to private non-financial corporationsNet lending, 12 months % change
0
10
20
30
40
50
60
70
0
100
200
300
400
500
600
700
800
900
1,000
Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10
£bn£m
Outstanding bank deposits and total lending to SMEs
New term lending (lhs) Outstanding bank deposits (rhs)
Source: Bank of England, BBA
Positive start to 2011 for asset finance
-50
-40
-30
-20
-10
0
10
20
30
Feb '09 May '09 Aug '09 Nov '09 Feb '10 May '10 Aug '10 Nov'10 Feb'11
% New business – 3 month growth trend
Total new business Excluding purchase of leasing portfolios
Source: FLA
Core markets report growth
New business by asset1 Feb 11£m
% changey-on-y
3 months to Feb 11
£m
% changey-on-y
12 months to Feb 11
£m
% changey-on-y
New carsUsed carsCommercial vehiclesAircraft, ships and rolling stockPlant and machineryIT equipmentBusiness equipmentPropertyInternational assetsOther
Total (excluding receivables)
Receivables
31440
32424
24367
19414
110114
1,444
13
-3%-23%38%
-71%5%0%
72%-45%
1998%10%
17%
-31%
1,042130914131739288547
51184446
4,471
638
1%-19%27%
-51%3%
-14%51%
-56%127%
48%
9%
244%
5,476583
3,594720
3,3241,0741,871
222631
1,458
18,951
1,592
12%-11%
7%-46%
4%-15%16%
-12%-59%
8%
-3%
242%
1. Cumulative totals are subject to rounding differences
Source: FLA
Growth across all channels in February
-50
-40
-30
-20
-10
0
10
20
30
40
50
Feb '09 Oct '09 Jun '10 Feb '11
%
New business growth trend 3 months compared with same period a year earlier
Direct finance Broker finance Sales finance
New business Feb 11
£m
% chgy-on-y
12 mths to
Feb 11£m
% chgy-on-y
By channel
High value
Direct finance
Broker finance
Sales finance
Total
By product
Leasing full payout
Leasing residual risk
Lease/Hire purchase
Other finance
Total
Excluding receivables
214
713
218
311
1,457
211
484
514
247
1,457
1,444
92%
3%
13%
18%
16%
19%
48%
2%
-1%
16%
17%
2,750
10,496
2,981
4,316
20,543
3,933
5,292
7,823
3,496
20,543
18,951
-9%
5%
19%
-3%
3%
18%
-8%
13%
-10%
3%
-3%
Source: FLA
22% of investment funded by FLA members
0
5
10
15
20
25
30
35
Q1 07 Q4 07 Q3 08 Q2 09 Q1 10 Q4 10
% of fixed capital investment funded by asset finance (excludes property and own-account software)
Quarterly market share Annualised market share
Source: FLA
Liquidations and insolvencies
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Q4'05 Q4'06 Q4'07 Q4'08 Q4'09 Q4'10
Number of personal insolvencies(England and Wales)
Debt relief orders IVAs Bankruptcies
Company liquidations Q4 10 % change y-on-y
12 mths to
Dec 10
% change y-on-y
Compulsory liquidations
Creditors’ voluntary liquidations
Total liquidations
Receiverships*
In administration (EA 2002)*
Company voluntary arrangements*
* not seasonally adjusted
1,200
2,755
3,955
302
642
170
-9.9%
-11.8%
-11.3%
-23.9%
-24.4%
-22.4%
4,792
11,253
16,045
1,309
2,831
765
-15.1%
-16.2%
-15.9%
-10.8%
-32.0%
5.4%
Source: Insolvency Service