By Michael S. Derby
NEW YORK (Reuters) - Leaders of factory and service sector firms in the New York Fed’s district said access to credit has been mostly stable in May over the last three months, but a number saw tougher times ahead.
The bank said Tuesday in its latest Business Leaders Survey for May that 20% of manufacturing and factory company chiefs reported that they found credit harder to access over the last three months, which the bank said was similar to what was seen in the prior quarter.
But looking forward, around 30% of respondents expect credit access to get worse, and very few respondents to the survey see credit getting better.
"When those reporting worsening conditions were asked about the specific factors that have been worsening over the past three months, the most highly cited factor was interest rates on both new and current loans," the report said, linking the challenges to the central bank's rate hikes.
Factory firms said they would navigate tougher credit by adjusting payrolls or wages, while service sector firms said they would address challenges through price changes.
The bank also reported that for May, its Business Leaders survey activity index fell by seven points from April to -16.8. It said the business climate index was little changed at -45.8 in May.