NEW YORK (Reuters) - Financing for capital equipment investment tumbled for the seventh straight month in February, according to a trade group representing lenders who finance half the capex investment in the United States.
The Equipment Leasing and Finance Association told Reuters on Tuesday that its capex financing index fell 37.7 percent last month compared with a year earlier, a sharper decline than the 24 percent drop recorded in January.
The index, which precedes the Commerce Department's durable goods report by a day, measures economic activity for the $650 billion equipment finance sector.
"The first quarter of 2009 continues on a downward trend as businesses pull back from making new investments in plant and equipment," ELFA President Kenneth Bentsen said in a statement.
New business volume fell 26.7 percent between January and February, to $3.3 billion, ELFA said, while capex financing approvals fell by half a percentage point to 64.7 percent, a record low.
It said 47 percent of participating companies reported that fewer transactions were submitted for approval during February due to tightening underwriting standards and lower demand. Chargeoffs and receivables more than 30 days overdue rose, while employment among equipment finance companies was down.
The trade group's members include Wells Fargo Equipment Finance (WFC.N), Bank of America Corp (BAC.N), GE Capital (GE.N) and the in-house finance arms of Caterpillar Inc. (CAT.N) and Deere & Co (DE.N), as well as Dell Financial Services DELL.O, Siemens Financial Services (SIEGn.DE) and Verizon Capital Corp (VZ.N), among others.
(Reporting by Nick Zieminski; Editing by Steve Orlofsky and John Wallace)