© 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 11% more in February than last year to finance equipment investments, industry body Equipment Leasing and Finance Association (ELFA) said on Wednesday.
“Steady rise in short-term interest rates and stubborn inflationary pressures do not seem to have suppressed demand for productive equipment by U.S. businesses,” ELFA Chief Executive Ralph Petta said.
Companies signed up for new loans, leases and lines of credit worth $7.9 billion last month, compared with $7.1 billion a year earlier.
“We remain optimistic but sensitive to credit quality as economic conditions are volatile,” said Marc Gingold of Fleet Advantage, a heavy-duty leasing firm.
ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 75.7%, a marginal increase from 75.1% in January.
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:) and financing affiliates or units of Caterpillar Inc (NYSE:), Dell Technologies (NYSE:) Inc, Siemens AG (OTC:), Canon Inc and Volvo AB (OTC:).
The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index in March stood at 50.3, a decrease from 51.8 in February. A reading above 50 indicates a positive business outlook.