(Reuters) - U.S. companies’ borrowing to spend on capital investment rose 7 percent in November from a year ago, a trade group representing capital equipment lenders said on Wednesday.
The companies signed up for $8.0 billion in new loans, leases and lines of credit last month, up from $7.5 billion a year earlier. However, borrowings fell 10 percent from October, the Equipment Leasing and Finance Association (ELFA) said.
“November new business volume, although down from the prior month, is still in a very acceptable range, showing continued strength in capex spending,” ELFA Chief Executive Officer Ralph Petta said.
Future economic uncertainty and full absorption of the tax changes are causing some reluctance with capex spending on equipment, said Harry Kaplun, president of specialty finance at Frost Bank, which is an ELFA member.
Washington-based ELFA, which reports economic activity for the $1 trillion equipment finance sector, said credit approvals were 77.2 percent in November, up from 76.5 percent in October.
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, BB&T Corp, CIT Group Inc, the financing affiliates or units of Caterpillar Inc, Deere & Co, Verizon Communications Inc, Siemens AG, Canon Inc and Volvo AB.
The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index for December is 55.5, down from the November index of 58.5.
A reading of above 50 indicates a positive outlook.
Reporting by Yadarisa Shabong; Editing by Maju Samuel