October 22, 2019 / 7:07 PM / 2 months ago

U.S. business borrowing for equipment rises 18% in September: ELFA

FILE PHOTO: The engine and drive train are pictured with the body on the assembly line at the General Motors (GM) manufacturing plant in Spring Hill, Tennessee, U.S., August 22, 2019. REUTERS/Harrison McClary

(Reuters) - U.S. companies’ borrowing to spend on capital investments rose 18% in September from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Tuesday.

The companies signed up for $10 billion in new loans, leases and lines of credit last month, up from $8.5 billion a year earlier. Borrowings rose 9% from the previous month.

“Consumer spending continues to fuel the economy, notwithstanding signs of caution and concern raised by some over the impact of trade frictions with China, a pull-back in the U.S. manufacturing sector and recent geopolitical events in Syria, Hong Kong and elsewhere,” ELFA Chief Executive Officer Ralph Petta said in a statement.

Washington-based ELFA, which reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 76.3%, down from 76.6% in August.

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.

The 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 units of Caterpillar Inc (CAT.N), Dell Technologies Inc (DELL.N), Siemens AG (SIEGn.DE), Canon Inc (7751.T) and Volvo AB (VOLVb.ST).

The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its monthly confidence index in October is 51.4, down from September’s 54.7.

A reading of above 50 indicates a positive outlook.

Reporting by Dominic Roshan K.L. in Bengaluru; Editing by Maju Samuel

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