Lease Employment Not Keeping Up with Sales Increase
The Equipment Leasing Association (ELA) Monthly Leasing Index (MLI) shot up to $7.7 billion in December, the high of the year, to the November's so-called " low anomaly" of $3.9 billion in new leases and loan volume from 19 major leasing companies, who make up the ELA MLI index. Employment only saw 236 new employees for the entire year of 2005; .026%. “December's larger than normal (sales) total was expected as the fourth quarter drew to a close and respondent companies were closing as many deals as possible. Hopefully this level of new business volume will continue in 2006,” said Ralph Petta, the ELA's vice president of Industry Services, “One respondent reported that their December totals were greater than the rest of the year combined, “he added. “All but one respondent recorded increases in their new business volume for December.” The year began at $4.0 billion and ended at its highest monthly level of $7.7 billion as the quarterly reports give an almost steady climb.
Credit approvals were highest in the first quarter with January hitting a high of 89.1%, then fell in April and May, but the last two quarters show a rising increase to 81.45% at the end of the year.
Charge offs also increase from .04% at the beginning of the year to .085% at the end. By the quarterly increase, as business increases, so did the average losses.
Portfolio quality remained stable with delinquencies remaining fairly constant when compared to November. Charge-offs as a percentage of net receivables, increased to 0.85% over November's 0.53%. According to Petta, the increase can be attributed to one respondent with larger than average figures who reported that they cleaned out their aircraft portfolio, absorbing those losses. Aging of portfolio receivables appears stable with no apparent major changes, fluctuations due to seasons perhaps:
Only 236 employees were added to these leasing companies through the year. January started with 8,752 and ended with 8,988. While the second quarter rose to 9,242, the numbers cooled down as per the following chart.
Participants in the ELA Monthly Leasing Index
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