(Reuters) - U.S. companies' borrowing to spend on capital investments rose 15% in July from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Thursday.
Companies signed up for $9.4 billion in new loans, leases and lines of credit last month, up from $8.2 billion a year earlier. Borrowings fell 5% from the previous month.
ELFA Chief Executive Officer Ralph Petta said that despite "early warning signs" of an economic downturn, loan origination activity has been strong mid-summer.
"While credit quality in these portfolios is something to monitor carefully, business owners continue to invest in productive assets," Petta said.
Washington-based ELFA, which reports economic activity for the $1 trillion equipment finance sector, said credit approvals totaled 75.7%, down from 77.0% in June.
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.
The index is based on a survey of 25 members that include Bank of America Corp (N:BAC), BB&T Corp (N:BBT), CIT Group Inc (N:CIT) and the financing affiliates or units of Caterpillar Inc (N:CAT), Dell Technologies Inc (N:DELL) Siemens AG (DE:SIEGn), Canon Inc (T:7751) and Volvo AB (ST:VOLVb).
The Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said its monthly confidence index in August is 58.9, up from the July index of 57.9.
A reading of above 50 indicates a positive outlook.