June 20 (Reuters) - U.S. companies borrowed more in May to invest in new equipment ranging from computer systems to aircraft, the Equipment Leasing and Finance Association (ELFA) said on Thursday.
Companies signed up for $7.5 billion in new loans, leases and lines of credit last month, up 21 percent from a year earlier.
The borrowing remained unchanged on a month-on-month basis in May.
“The May numbers provide concrete evidence of growing demand for productive assets by a cross section of the business community,” ELFA Chief Executive William Sutton said in a statement.
Washington-based ELFA, a trade association that reports economic activity for the $725 billion equipment finance sector, said credit approvals totaled 78.8 percent in May, up from 77.2 percent in April.
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 CIT Group Inc, Bank of America Corp, BB&T Corp and the financing affiliates or subsidiaries of Caterpillar Inc, Deere & Co, Dell Inc, Verizon Communications Inc, Siemens AG, Canon Inc, and Volvo AB.
ELFA said it expects the positive trend to continue into the summer.
“We think the second quarter should be strong. We have another month to complete the quarter, and all of our indicators seem to point to a pretty strong end of the quarter,” said Ralph Petta, chief operating officer of ELFA.
The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said on Wednesday its June confidence index rose to 57.3 from 56.7 in May, reflecting industry participants’ increasing optimism despite continued moderate growth of business investment in equipment.
A reading of above 50 indicates a positive outlook.