March 22, 2019 / 7:08 PM / 6 months ago

U.S. business borrowing for equipment falls 24 percent in February: ELFA

FILE PHOTO: A Vulcan Materials Company construction aggregate facility is pictured in Convent, Louisiana, U.S., June 11, 2018. REUTERS/Jonathan Bachman

(Reuters) - U.S. companies’ borrowing to spend on capital investments fell 24 percent in February from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Friday.

Companies signed up for $5.9 billion in new loans, leases and lines of credit last month, down from $7.7 billion a year ago. The fall was 18 percent, when compared to the previous month.

“Monthly new business volume declined for the first time in almost two years...¬†Fundamentals in the U.S. economy appear to be holding up,” ELFA Chief Executive Officer Ralph Petta said in a statement.

“With the Fed holding interest rates unchanged, these and other economic data bear monitoring in the coming months to better understand the dip in equipment financing volume for February.”

Washington-based ELFA, a trade association that reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 76 percent in February, marginally down from 76.1 percent in the previous month.

The data on U.S. business borrowing was based on a survey among 25 members including Bank of America Corp, BB&T Corp, CIT Group Inc and the financing affiliates 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 March is 60.4, up from 56.7 in February. Any reading above 50 indicates a positive outlook.

Reporting by Shravanth Vijayakumar in Bengaluru; Editing by James Emmanuel

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