OTTAWA (Reuters) - Lending to small Canadian businesses declined in December as activity in the agriculture and retail sectors pulled back at the end of the year, data released on Thursday showed.
The PayNet Small Business Lending index fell to 112.6 from a downwardly revised 115.9 in November. November’s index was originally reported at 116.9. Lending to medium-sized business also declined to 193.1 from 199.8.
Compared to a year ago, small business lending was down 6 percent, while medium businesses tumbled 12 percent.
Among the sectors where borrowing declined, the measure of agriculture businesses fell to 187.3 from 191.3, while the retail industry was down to 197.5 from 201.9.
The weakness bodes poorly for broader economic growth, said PayNet President Bill Phelan. Still, with the delinquency rate very low, corporate borrowing could bounce back, he said.
“Right now, it’s looking like a rough patch that could easily turn around because the financial health is so strong,” Phelan said.
The number of small businesses that were 30 days or more behind on their loans fell to 0.82 percent from November’s 0.86 percent. Those that were 90 days or more in arrears held steady at 0.25 percent.
Reporting by Leah Schnurr; Editing by James Dalgleish