U.S. business borrowing for equipment jumps 28% in January: ELFA

FILE PHOTO: Cranes and other construction equipment are seen towering over Las Vegas hotels at CONEXPO-CON/AGG convention at the Las Vegas Convention Center in Las Vegas, Nevada, U.S. March 9, 2017. REUTERS/David Becker

(Reuters) - U.S. companies’ borrowings for capital investments surged about 28% in January from a year earlier, as a strong U.S. economy drove up business spending, the Equipment Leasing and Finance Association (ELFA) said on Tuesday.

The companies signed up for $9.2 billion in new loans, leases and lines of credit last month, up from $7.2 billion a year earlier. But borrowings fell about 29% from the previous month.

“Underlying fundamentals in the U.S. economy — strong job growth, low inflation, low interest rates, continuation of a bull equities market and solid business confidence — all add up to a growing demand for productive equipment necessary to keep businesses expanding and profitable,” ELFA’s Chief Executive Officer Ralph Petta said.

Washington-based ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 76.3% in January, down from 77.1% in December.

ELFA’s leasing and finance index measures the volume of commercial equipment financed in the United States.

The index is based on a survey of 25 members, including Bank of America Corp BAC.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 and Volvo AB VOLVb.ST.

The Equipment Leasing and Finance Foundation, ELFA’s non-profit affiliate, reported monthly confidence index of 58.7 in February, slightly easing from the January index reading of 59.9, ELFA said.

A reading of above 50 indicates a positive business outlook.

Reporting by Sanjana Shivdas in Bengaluru; Editing by Shailesh Kuber