(Reuters) - U.S. companies borrowed 3% less in December to finance their investments in equipment, the Equipment Leasing and Finance Association (ELFA) said on Tuesday, as inflation and Omicron cloud economic outlook.
Firms signed up for $11.8 billion in new loans, leases and lines of credit last month, compared with $12.1 billion a year earlier. Borrowings, however, rose 49% from November.
"The outlook for the industry, and indeed overall economy, is somewhat cloudy, with unabated inflation, the Fed poised to increase interest rates, equities markets in a recent tailspin," ELFA Chief Executive Officer Ralph Petta said in a statement, adding that the Omicron coronavirus variant remains a concern in the United States.
ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 78.6%, down from 77.2% in November.
The Washington-based body'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), CIT Group (NYSE:CIT) Inc 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).
The Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said its confidence index for January was at 63.9%, unchanged from December. A reading above 50 indicates a positive business outlook.