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Canada small business lending down for 4th month in March-PayNet

Published 2016-05-26, 05:00 a/m
© Reuters. Canada small business lending down for 4th month in March-PayNet

OTTAWA, May 26 (Reuters) - Borrowing activity by Canadian
small businesses fell for the fourth month in a row in March,
data from PayNet showed on Thursday, suggesting firms' appetite
for investment remained weak and boding poorly for economic
growth.
PayNet's Canadian small business lending index tumbled to
119.1 in March from 124.3 the month before. An index of lending
to medium-sized businesses similarly slumped to 206.5 from
225.0.
Canada's economy has been struggling to gain momentum since
the plunge in oil prices put the country in a brief recession
last year.
"It's almost a contagion occurring," said PayNet President
Bill Phelan of the dampening effect on the economy.
"It's becoming more prevalent among a broader swath of the
economy."
The Bank of Canada said on Wednesday that although growth
looks to have picked up in the first quarter, business
investment and intentions remain disappointing.
By region, only Ontario and British Columbia saw activity
improve. The two provinces have had relatively strong economies
compared to regions that are tied to oil production. Lending in
Alberta, where the country's oil sands are located, was down 21
percent compared to a year ago.
By industry, the manufacturing sector continued its trend of
modest monthly increases but other sectors pulled back,
including agriculture and retail.
The 30-day delinquency rate edged up to 1.09 percent, while
the number of companies that were more than 90 days behind on
their loans held steady at 0.32 percent.
The regional effect was visible there as well, with Alberta
seeing the biggest increase in the 30-day delinquency rate, up
0.4 percent from a year ago.

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