US corporate borrowing for equipment drops 1% in June – ELFA

July 25 (Reuters) – U.S. companies borrowed 1% less in June to finance investment in equipment than a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Monday.

Companies signed $10.3 billion worth of new loans, leases and lines of credit last month, up from $10.4 billion a year earlier. However, borrowing was up 6% from January.

“Inflation continues to provide a headwind in an otherwise benign economy. The Fed has signaled its determination to address these inflationary pressures by steadily raising short-term interest rates, without throwing cold water on our post-pandemic economic recovery,” said ELFA Managing Director Ralph. Petta said in a statement.

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ELFA, which reports economic activity for the nearly $1 trillion equipment finance sector, said credit approvals totaled 78.1%, down from 76.8% in May.

The Washington-based organization’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 subsidiaries or financing units of Caterpillar Inc (CAT.N), Dell Technologies Inc (DELL.N), Siemens AG (SIEGn. DE), Canon Inc and Volvo AB (VOLVb.ST).

The Equipment Leasing & Finance Foundation, the nonprofit affiliate of ELFA, said its confidence index in July was 46.1%, down from 50.9% in June. A reading above 50 indicates a positive trading outlook.

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Reporting by Kannaki Deka in Bangalore; Editing by Devika Syamnath

Our standards: The Thomson Reuters Trust Principles.

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