OTTAWA (Reuters) - Lending activity to small businesses in Canada declined in October as a retreat in customer-oriented industries outpaced gains in the manufacturing sector, a report showed on Wednesday.
The PayNet Canadian Small Business Lending Index fell to 113.6 from 116.4 in September. The measure has declined in eight out of 10 months in 2016 so far. Lending to medium-sized firms similarly fell to 208.8 in October from 222.4.
While borrowing by firms in consumer-related areas such as retail and food and accommodation slowed, the index for manufacturers increased to 66.1 from 65.5.
That’s a positive sign for an economy that has been grappling with the impact of lower oil prices, said PayNet President Bill Phelan. Economists have been looking for stronger growth in the manufacturing sector to help offset the downturn in Canada’s oil patch.
“We see this stable churn where there’s a change in these sectors from energy and the consumer into manufacturing and exporting,” said Phelan. “It just shows the constant shift that is going on with the Canadian economy.”
Delinquency rates were also encouraging with the number of firms that were 30 days or more behind on their loans falling to 1.08 percent in October from 1.17 percent the month before.
Companies that were late by 90 days or more held steady at 0.36 percent.
Reporting by Leah Schnurr; Editing by Alan Crosby