September 23 (Reuters) – U.S. companies borrowed 4% more in August to finance investments in equipment than a year earlier, industry body ELFA said on Friday, raising doubts about the sustainability of the slowdown in growth.
The companies registered $8.8 billion in new loans, leases and lines of credit last month, compared to $8.5 billion a year earlier, according to the Equipment Leasing and Finance Association (ELFA). Borrowers have increased by 5% since January.
“The Fed’s recent 75-basis-point jump in short-term interest rates and the prospect of a firmer accommodation show when — and how much — these same business owners will continue to grow and invest in equipment,” LFA CEO Ralph Petta said in a statement.
ELFA, which reports economic activity in the nearly $1 trillion equipment finance sector, said loan approvals fell to 75.2% from 78% in July.
The Washington-based body’s Leasing and Financing Index measures the amount of commercial instruments financed in the United States.
The index is based on 25 members including Bank of America Corporation and its financing affiliates or Caterpillar Inc, Dell Technologies Inc, Siemens AG, Canon Inc and Volvo AB.
The Equipment Leasing & Finance Foundation, LFA’s non-profit affiliate, said the confidence index in September stood at 48.7% compared to 50% in August. A reading above 50 indicates a positive business outlook. (Reporting by Kanaki Deka in Bengaluru; Editing by Vinay Dwivedi)