Canada Q1 commercial lending steadies: PayNet
By Ka Yan Ng
TORONTO (Reuters) - Canadian commercial lending was steady in the first quarter, suggesting a stable borrowing environment where businesses are cautious about the economy yet ready to take advantage when demand picks up, according to data released by PayNet Inc. on Tuesday.
The Canadian Business Lending Index, which tracks the creation of new loans, was unchanged from the fourth quarter when the data showed its first uptick in new lending after a two-year decline, said PayNet, which reports on the commercial lending industry.
Commercial lenders include many manufacturers of construction, farm or medical equipment, whose loans and leases to customers are secured against the products sold.
William Phelan, PayNet's president and founder, told Reuters that the current index is about 30 percent below the high reached in late 2007.
"There is plenty of capacity to grow," he said. "Canadian businesses are set for growth. They really just need demand to return to the economy."
Canada's economic recovery has been gaining steam, although it is still patchy in some sectors. Manufacturing sales data recently came in at the highest quarterly level since the start of the recession, but the latest purchasing activity and housing starts figures have been unexpectedly soft.
Skokie, Illinois-based PayNet also produces the Thomson Reuters/PayNet Small Business Lending Index. Changes in that index have tended to presage changes in the overall U.S. economy by two to five months.
Until last quarter, the Canadian Business Lending Index had steadily declined for two years, suggesting thousands of small and medium-sized businesses were holding back on investment. But not now. Continued...