MEMBERS of the Finance & Leasing Association (FLA), who last year

financed over 30% of all UK fixed investment through leasing and

industrial hire purchase, are forecasting a gradual improvementt in

business confidence.

The FLA's latest economic survey, carried out at the end of June shows

that 55% of the memebership expect confidence to increase over the next

three months. This is a much lower figure than just after the election

when 83% expected an improvement.

Over the next three months, just over half the members (51%) expect

the demand for leases in the middle ticket range (#50,000 -- #1m) to be

up and fewer members (41%) expect hire purchase transaction in that

range to increase.

In the big ticket area, contracts over #1m, under half the membership

expect the demand to rise.

For the largest transactions of over #5m, this drops to 385 for

leasing and 24% for hire purchase. All these figures are from an

historically low base.

The most promising areas are in small ticket, up to #50,000, with 70%

of members forecasting an increase in leasing and hire purchase and the

motor finance sector, with 60% expecting an improvement.

However, the FLA points out that both these areas have suffered

particularly badly in the recession.