U.S. business borrowing for equipment falls about 7{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in April: ELFA

(Reuters) – U.S. companies’ borrowings for capital investments fell about 7{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in April from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Tuesday.

The companies signed up for $8.2 billion in new loans, leases and lines of credit last month, down from $8.8 billion a year earlier. Borrowings fell 8{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} from the previous month.

“Business performance shows deterioration from the effects of the coronavirus pandemic, with volume levels and portfolio quality metrics both falling in tandem” ELFA Chief Executive Officer Ralph Petta said.

This pattern is expected to continue into the summer months as the nation’s economy dips into a recession, he added.

Washington-based ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 71.7{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in April, down from 74.2{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in March.

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 25.8 in May, up from the all-time low of 22.3 in April.

A reading of above 50 indicates a positive business outlook.