Business Equipment Financing Volumes Surged in August

Leasing of business equipment increased last month, suggesting many companies are beginning to invest more heavily in their operations. Equipment investment is often viewed as an indication of businesses' financial health and confidence.

A report released Tuesday by the Equipment Leasing and Finance Association showed a 33 percent surge in equipment financing volumes last month, compared to the same period in 2010. The gain marks a total volume of $5.7 billion. Overall, there was a 25 percent year-over-year increase in financing for equipment purchases.

Credit conditions also improved slightly on a month-to-month basis, as the number of approved lease applications grew from 76.3 percent to 77.6 percent.

"It is clear from less-quantitative reporting that equipment finance executives still believe the storm clouds hovering over our economy have not yet dissipated," said ELFA president and CEO William Sutton. "Until the U.S. and global economies begin to show signs of strengthening in a meaningful and sustainable way, current and future business performance will continue to ebb and flow."

Economists have been watching business investment in equipment and personnel, as they are key indicators of financial vitality. While August showed gains in one aspect of operational investment, hiring prospects remain sparse.