(Reuters) - U.S. companies’ borrowing to spend on capital investment fell in January, the Equipment Leasing and Finance Association (ELFA) said.
Companies signed up for $6.0 billion in new loans, leases and lines of credit last month, down 12 percent from a year earlier. Their borrowing fell 52 percent from December.
“With annual volume down slightly and credit quality mixed, January MLFI-25 metrics mirror the volatility we are seeing in the equity markets both here and abroad,” ELFA Chief Executive Ralph Petta said in a statement.
“Despite favorable signs in the labor and housing markets, business confidence appears somewhat shaky, translating to uneven capex in certain verticals and equipment finance sectors.”
Washington-based ELFA, a trade association that reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 78 percent in January, down from 80.2 percent in December.
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 and the financing affiliates or subsidiaries 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 fell to 48.3 in February from 54 percent in January.
A reading of above 50 indicates a positive outlook.
Reporting by Radhika Rukmangadhan in Bengaluru