The Equipment Leasing and Finance Association (ELFA) released its monthly leasing and finance index, which summarizes economic activity for the $518 billion equipment finance sector and reflects the volume of commercial equipment financed in the U.S.
The report revealed that overall new business volume for May rose 5% when compared with the same period in 2009. When compared to April, data indicated that volume decreased by 6%, to $4.4 billion from $4.7 billion .
Although delinquencies have shown a slight increase in the past month, the results suggest a significant improvement over the past year. Charge-off also decreased, dropping to 1.6% from 1.7% in May 2009.
Credit approvals, which remained flat at 68% since April, were also up slightly compared to the same year-long period. Total headcount for equipment finance companies remained flat in the April to May period as well, but decreased substantially since May 2009.
Participants in a CFO survey conducted by Duke University predicted stronger capital spending in the next 12 months. Hiring and borrowing conditions will remain tight in the near future, according to the survey.
The monthly confidence index, a related ELFA indicator, was down to 65.0 for June, a drop from a 67.4 figure in May.
“Despite a modest growth spurt in new business volume in May, the data reflect what most economists recognize: a slowly recovering economy and somewhat soft demand by business for capital equipment,” said William G. Sutton, ELFA president. “But the trend appears to be heading in the right direction.”
ELFA is the trade association that represents companies in the $518 billion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods.