(Reuters) – U.S. firms borrowed 7% more to finance equipment investments in April than a year ago, according to the Equipment Leasing and Finance Association. This is because companies are increasing production in order to keep up with demand.

The $10.5 million in loans, leases, or lines of credit that the companies received was a significant increase from $9.3B a year prior.

Ralph Petta, chief executive officer of ELFA, stated in a statement that “soaring energy prices” and “inflation are major headwinds for the industry moving into summer months.”

ELFA reports on economic activity in the $1-trillion sector of equipment financing. Credit approvals were down to 77.4% from March’s 78.3%.

Washington-based ELFA measures the US commercial equipment financing volume using its leasing and finance index.

This index was compiled from a survey of 25 members including Bank of America Corp (NYSE 🙂 and their financing affiliates. Caterpillar Inc (NYSE -), Dell Technologies (NYSE –) Inc, Siemens AG (OTC ) Canon Inc and Volvo AB AB (OTC )

The Equipment Leasing and Finance Foundation is ELFA’s non-profit affiliate. It reported that their confidence index was 49.6 in May, down from 56.1 for April. Positive business prospects are indicated by a reading of 50 or more