Data Snapshot: Private Sector Credit - Further Bright Signs for Businesses

Good afternoon,

 

• Private sector credit grew at 0.4% in October, and has held at a pace of growth of between 0.4-0.5% over the past four months. The annual rate of growth held at 4.6% in October, unchanged from September.
• Business credit has picked up in recent months. In October, it grew at a rate of 0.6%. The annual pace edged up from 4.4% in September to 4.7% October, the strongest annual growth in nearly two years. The improvement adds to signs of strength in conditions among businesses after a healthy upgrade to business spending plans in capex data yesterday.
• The picture remains soft for lending to other sectors. Housing credit is continuing to moderate, growing by 0.3% in October. The annual rate eased to its weakest in five years. Weakness was driven by credit for investor housing, which had no growth in October. Credit conditions for investors have tightened to a greater extent, however, credit to owner occupiers have also been impacted. Owner-occupier housing credit grew at 0.4% in October, the weakest since May 2015.
• Other personal credit remained weak, falling 0.2% in October, and has been in decline for four consecutive months. The annual rate of contraction weakened to -1.6%, the softest pace since late 2009. 
• Headwinds for credit growth remain given the prospect of tighter lending conditions. However, the improvement in business credit in recent months is encouraging.

 

 

Please see the attached report for more information.

 

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