US corporate borrowing for equipment fell 3% in December – ELFA | Investment News

(Reuters) – U.S. companies borrowed 3% less in December to finance investment in equipment, the Equipment Leasing and Finance Association (ELFA) said on Tuesday, as inflation and Omicron cloud the economic outlook.

Companies signed $11.8 billion worth of new loans, leases and lines of credit last month, up from $12.1 billion a year earlier. Borrowing, however, was up 49% from November.

“The outlook for the industry, and indeed the overall economy, is somewhat cloudy, with inflation steady, the Fed poised to raise interest rates, stock markets have recently fallen,” said ELFA chief executive Ralph Petta in a statement, adding that the Omicron coronavirus variant remains a concern in the United States.

ELFA, which reports economic activity for the nearly $1 trillion equipment finance sector, said credit approvals totaled 78.6%, down from 77.2% in November.

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, CIT Group Inc and subsidiaries or financing units of Caterpillar Inc, Dell Technologies Inc, Siemens AG, Canon Inc and Volvo AB.

The Equipment Leasing & Finance Foundation, the nonprofit affiliate of ELFA, said its confidence index for January was 63.9%, unchanged from December. A reading above 50 indicates a positive trading outlook.

(Reporting by Nathan Gomes in Bengaluru; Editing by Vinay Dwivedi)

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