US business borrowing for equipment falls 2% in July - survey
28/08/2023 20:00
Aug 28 (Reuters) - U.S. companies borrowed nearly 2%
less in July than last year to finance equipment investments, an
Equipment Leasing and Finance Association (ELFA) survey showed
on Monday.
The companies signed up for new loans, leases, and lines of
credit worth $9.9 billion last month, compared with $10.1
billion a year earlier, the industry body's survey said.
"In the current relatively high-interest rate environment in
which the industry finds itself this summer, survey respondents
are reporting some softness, coinciding with expectations by
economists that overall investment in equipment and software
will slow down in the second half of 2023," ELFA Chief Executive
Ralph Petta said.
ELFA, which reports economic activity for the nearly
$1-trillion equipment finance sector, said credit approvals
totaled 75.3%, down from 76.1% in June.
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 BAC.N and 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 .
"Rising interest rate environments will slow consumer
spending. Cheap money notes that begin to expire will be
replaced by more expensive money, and new investments will be
reduced," said Craig Ault, Honour Capital's chief revenue
officer.
The Equipment Leasing & Finance Foundation, ELFA's
non-profit affiliate, said its confidence index in August stood
at 50.4, an increase from 46.4 in July. A reading above 50
indicates a positive business outlook.
(Reporting by Pratyush Thakur in Bengaluru; Editing by Maju
Samuel)
((pratyush.thakur@thomsonreuters.com;))