July 24, 2018 / 7:01 PM / a year ago

U.S. business borrowing for equipment falls 7 pct in June - ELFA

July 24 (Reuters) - U.S. companies’ borrowing to spend on capital investments fell 7 percent in June from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Tuesday.

Companies signed up for $9.1 billion in new loans, leases and lines of credit last month, down from $9.8 billion a year earlier. However, borrowing rose 18 percent from $7.7 billion in May.

“Most sectors of the equipment finance industry are performing well, as the economy’s underlying fundamentals continue to hold up in the face of slowly rising interest rates,” ELFA Chief Executive Officer Ralph Petta said in a statement.

“A strong corporate earnings season and continued strength in the labor markets create a positive environment for capex spending.”

Washington-based ELFA, a trade association that reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 75.8 percent in June, down from 76.8 percent in May.

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 units 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 July is 62.8, down from 66.2 in June. A reading of above 50 indicates a positive outlook. (Reporting by Shravanth Vijayakumar in Bengaluru; Editing by Bernard Orr)

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