(Reuters) - U.S. companies’ borrowing to spend on capital investment fell in May, the Equipment Leasing and Finance Association (ELFA) said.
Companies signed up for $6.8 billion in new loans, leases and lines of credit last month, down 7 percent from the same month a year earlier and also from April.
ELFA Chief Executive Ralph Petta said eroding business confidence due to uncertainty around the U.S. presidential elections, the health of the country’s economy and geopolitical risks have weighed on for business owners’ investment decisions.
Credit approvals totaled 76.5 percent in May, down from 78.2 percent in April, said ELFA, a Washington-based trade association that reports economic activity for the $1 trillion equipment finance sector.
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 units of Deere & Co (DE.N), Volvo AB (VOLVb.ST), Caterpillar Inc (CAT.N), Verizon Communications Inc (VZ.N), Siemens AG (SIEGn.DE) and Canon Inc (7751.T).
The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index fell to 52.3 in June from 55.1 in May.
A reading of above 50 indicates a positive outlook.
Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Savio D'Souza