U.S. business borrowing for equipment falls 1 percent in December: ELFA
Reuters
Published Jan 23, 2019 03:19PM ET
U.S. business borrowing for equipment falls 1 percent in December: ELFA
(Reuters) - U.S. companies' borrowing to spend on capital investment fell 1 percent in December from a year ago, a trade group representing capital equipment lenders said.
The companies signed up for $12.7 billion in new loans, leases and lines of credit last month, down from $12.8 billion a year earlier. However, borrowings rose 59 percent from November, the Equipment Leasing and Finance Association (ELFA) said.
"December new business volume capped off a very good year for the equipment leasing and finance industry. Solid demand, an abundant supply of funding in the credit markets, and quality portfolios all contributed to an extremely healthy equipment finance sector in 2018," ELFA Chief Executive Officer Ralph Petta said in a statement.
According to him, most economists expect a lower-growth scenario in 2019, as a result of trade policy frictions, rising interest rates, and the current government shutdown.
"Whether these and other potential headwinds act as a brake on continued growth in the equipment finance sector over the next 12 months remains to be seen," Petta said.
Washington-based ELFA, which reports economic activity for the $1 trillion equipment finance sector, said credit approvals were 77.9 percent in December, up from 77.2 percent in November.
ELFA's leasing and finance index measures the volume of commercial equipment financed in the United States. It is designed to complement the U.S. Commerce Department's durable goods orders report, which it typically precedes by a few days.
ELFA's index is based on a survey of 25 members that include Bank of America Corp (N:BAC), BB&T Corp (N:BBT), CIT Group Inc (N:CIT), the financing affiliates or units of Caterpillar Inc (N:CAT), Deere & Co (N:DE), Verizon Communications Inc (N:VZ), Siemens AG (DE:SIEGn), Canon Inc (T:7751) and Volvo AB (ST:VOLVb).
The Equipment Leasing & Finance Foundation, ELFA's non-profit affiliate, said its confidence index for January is 53.4, down from the December index of 55.5.
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Written By: Reuters
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