OTTAWA (Reuters) - Commercial borrowing by small businesses in Canada climbed in October, data from PayNet showed on Tuesday, a sign that companies in the energy-dependent economy are adjusting to sharply lower oil prices and showing signs of expanding once more.
PayNet’s Canadian small business lending index rose to 140.8 from September’s 135.7. But the index of medium-sized businesses indicated some weakness, slipping to 204.6 from 209.5.
The data is collected by small business credit rating agency PayNet as reported by lenders. A small business is defined as one that has less than C$1 million ($730,000) in total credit outstanding.
Canada, where oil is a major export, was in recession in the first half of the year as the economy was hit by the shock of lower oil prices. Although growth resumed in the third quarter, early data has suggested the fourth quarter got off to a weak start. The recent renewed downturn in oil prices to near 11-year lows has reignited concerns about the country’s economy.
“It’s good news in that the small businesses are buoying the economy and they’re showing the road to transition and to the new economy for Canada,” said PayNet’s president Bill Phelan.
“What’s disappointing is that the medium-sized companies still haven’t been able to fully stabilize,” he said.
Among small business sectors, accommodation and food led the pack with a 6.8 percent gain. Some sectors that are sensitive to natural resources saw a pick-up, including a 2.9 percent increase for manufacturing, although agriculture fell 2.9 percent.
Delinquency rates continued to show stability, with the percentage of small businesses that were 30 days or more behind on loans falling to 0.92 percent from 0.94 percent. The number of companies that were more than 90 days behind held steady at 0.32 percent.
($1 = 1.3739 Canadian dollars)
Reporting by Leah Schnurr; Editing by Bill Rigby