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US business borrowing for equipment falls 8% in April- ELFA survey
Published May 24, 2023 03:23PM ET
© Reuters. FILE PHOTO: Manufacturing equipment is seen during a tour of Foxconn's electric vehicle production facility in Lordstown, Ohio, U.S. November 30, 2022. REUTERS/Quinn Glabicki
(Reuters) - U.S. companies borrowed nearly 8% less in April than last year to finance equipment investments, industry body Equipment Leasing and Finance Association (ELFA) said on Wednesday.
The companies signed up for new loans, leases and lines of credit worth $9.7 billion last month, compared with $10.5 billion a year earlier.
"It is not clear whether increased borrowing rates are constraining liquidity or if this decrease in originations is merely a blip in an otherwise healthy marketplace," ELFA Chief Executive Ralph Petta said.
ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 77.3%, up from 75.3% in March.
Washington-based 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 (NYSE:BAC) and financing affiliates or units of Caterpillar Inc (NYSE:CAT), Dell Technologies (NYSE:DELL) Inc, Siemens AG (OTC:SIEGY), Canon Inc and Volvo AB (OTC:VLVLY).
"Separately, (the) survey indicates that a growing segment of business heads is somewhat pessimistic about the short-term outlook for the economy, in general, and the equipment finance industry, specifically," Petta said.
The Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said its confidence index in May stood at 40.6, a decrease from 47.0 in April. A reading above 50 indicates a positive business outlook.
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