U.S. companies borrowed more last month to invest in everything from industrial equipment to aircraft, the Equipment Leasing and Finance Association (ELFA) said on Thursday.
Companies signed up for $7.2 billion in new loans, leases and lines of credit last month, up 9 percent from a year earlier. The borrowing fell 16 percent from June.
"While cooling off somewhat from a torrid June, this month's increase in financing activity matches a strengthening economy evidenced by a rebounding housing market, GDP growth and declining unemployment picture," ELFA Chief Executive William Sutton said in a statement.
Washington-based ELFA, a trade association that reports economic activity for the $725 billion equipment finance sector, said credit approvals totaled 78.6 percent in July, nearly unchanged from the previous two months.
ELFA's leasing and finance index measures the volume of commercial equipment financed in the United States. It is designed to complement the U.S. Commerce Department's durable goods orders report, which it typically precedes by a few days.
ELFA's index is based on a survey of 25 members that include Bank of America Corp (BAC.N), BB&T Corp (BBT.N), CIT Group Inc (CIT.N) and the financing affiliates or subsidiaries of Caterpillar Inc (CAT.N), Deere & Co (DE.N), Dell Inc DELL.O, Verizon Communications Inc (VZ.N), Siemens AG (SIEGn.DE), Canon Inc (7751.T) and Volvo AB (VOLVb.ST).
ELFA said it expects the positive trend to continue.
"These data points bode well for additional investment in capital equipment and an expanding U.S. economy," Sutton said.
The Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said its August confidence index rose to 61.0 from 59.4 in July. (r.reuters.com/myv52v)
A reading of above 50 indicates a positive outlook.
(Reporting by Sagarika Jaisinghani in Bangalore; Editing by Joyjeet Das)