(Reuters) – U.S. companies’ borrowings for capital investments surged about 28% in January from a year earlier, as a strong U.S. economy drove up business spending, the Equipment Leasing and Finance Association (ELFA) said on Tuesday.
The companies signed up for $9.2 billion in new loans, leases and lines of credit last month, up from $7.2 billion a year earlier. But borrowings fell about 29% from the previous month.
“Underlying fundamentals in the U.S. economy — strong job growth, low inflation, low interest rates, continuation of a bull equities market and solid business confidence — all add up to a growing demand for productive equipment necessary to keep businesses expanding and profitable,” ELFA’s Chief Executive Officer Ralph Petta said.
Washington-based ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 76.3% in January, down from 77.1% in December.
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>, CIT Group Inc <CIT.N> and the 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>.
The Equipment Leasing and Finance Foundation, ELFA’s non-profit affiliate, reported monthly confidence index of 58.7 in February, slightly easing from the January index reading of 59.9, ELFA said.
A reading of above 50 indicates a positive business outlook.
(Reporting by Sanjana Shivdas in Bengaluru; Editing by Shailesh Kuber)