U.S. companies borrowed less to spend on capital investment last month, said the Equipment Leasing and Finance Association (ELFA).
Companies signed up for $7.7-billion (U.S.) in new loans, leases and lines of credit last month, down 6 per cent from a year earlier. However, borrowing rose 20 per cent from August.
“Uncertainty created by the inability of policy makers to come together to agree on sustained tax and spending policy is holding back the U.S. economy, and in particular, capital investment,” ELFA chief executive officer William Sutton said in a statement.
Washington-based ELFA, a trade association that keeps track of economic activity for the $725-billion equipment finance sector, said credit approvals totalled 77.3 per cent in September, down from 79.1 the previous month.
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 including Bank of America Corp., BB&T Corp., CIT Group Inc. and the financing affiliates or subsidiaries of Caterpillar Inc., Deere & Co., Dell Inc., Verizon Communications Inc., Siemens AG, Canon Inc. and Volvo AB.
The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said on Monday that its October confidence index fell to 54.0 from 61.3 in September.
A reading of above 50 indicates a positive outlook.