Rising business confidence is persuading fleets to invest in new vehicles and increase their overall fleet size, research suggests.
Almost half (44.2%) said they expected to acquire more vehicles during the second half of this year compared to the same period last year.
A similar number (47.7%) expected their overall fleet expenditure to increase, according to a survey conducted by automotive intelligence company Sewells.
Asked to rate their business confidence on a scale of 1-10, with 10 being ‘extremely confident’, it also found a positive outlook.
Almost a third (29.1%) of respondents said they were ‘extremely confident’ about the next six months, while three-quarters (74.4%) ranked their outlook as 8, 9 or 10.
One respondent told Sewells that they anticipated a 20% increase in fleet size, while another said an increased workload would necessitate more staff and, therefore, company vehicles.
One in three (31.5%) respondents said they operated mainly in the public sector, compared to 55.4% in the private sector.
The optimistic outlook has also been reflected in research from Lloyds Bank in its twice-yearly Business in Britain report and the Corporate Vehicle Observatory (CVO) annual Fleet Barometer.
CVO research suggests that 40% of companies with 1,000-plus employees expect an increase in their fleet size, compared to 18% for businesses with 100-999 employees and 32% for companies with 10-99 employees.
Meanwhile, the Business in Britain report found that half of all management teams plan to raise money before the end of the year to support their growth ambitions.
Purchasing new plant and machinery was the highest priority for businesses, selected by two-fifths (40%) of respondents, and just over one-third selected marketing activities as the beneficiary of any funds raised.
Nearly one-quarter of respondents are considering investing in overseas expansion and research and development activity, while 12% would use the funding to develop a new training programme.
The research showed that only around 5% of all businesses are set to invest in transport assets.
However, a Fleet News poll suggested 41.3% of respondents expected their fleet to grow during 2014, compared to 50% that expected vehicle numbers to stay the same. Just 8.7% predicted their fleet size would fall.
“Improved trading conditions are helping management teams to look ‘above-the-parapet’ and raise capital to invest in their businesses,” said Andrew Hogsden, senior manager for strategic fleet consultancy at Lex Autolease.
“Businesses are becoming increasingly savvy in choosing the right vehicles, but also their role in staff attraction and retention and understanding how they can be financed.
“While some will still prefer to buy outright, we expect company bosses to explore their leasing options to best manage costs and cashflow, while accessing the vehicles they need to grow.”
The net balance of businesses which plan to increase staff levels in the next six months increased for the fifth consecutive Business in Britain survey.
The five-percentage point rise took the net balance to a new peak of 22%, with 31% of respondents anticipating a rise in headcount and 9% expecting some shrinkage.
This increase points to further employment gains as the recovery matures.
The upswing in planned capital expenditure has also continued for the fifth survey in a row, while the net balance jumped from 16% to 22%, which equals its all-time high.
The balance has been in positive territory for four consecutive surveys for the first time since 2006–7.
Business confidence was strongest in the south east at 58%, followed by the north east and Yorkshire and the east midlands and east, both at 57%.
It was the weakest in the north west and Wales, at 45% and 48% respectively.
Overall confidence was also below the national average in London, at 51%. Despite differences, the levels of confidence are consistent with robust levels of economic activity across all regions.
The latest data confirms a healthy fleet sector and follows research from the British Vehicle and Rental and Leasing Association (BVRLA), which also gave a positive outlook.
Of the commercial vehicle rental and leasing companies which responded to its 2014 CV Informer survey, three-quarters expect business to grow this year.
It also follows the halting of a 12-year fall in company car numbers, recently revealed in data from HM Revenue and Customs.
Hogsden concluded: “It is encouraging that new company vehicles, which we see as a barometer for long-term market confidence, are back on the agenda.”