Veda, Australia revealed the results of its business credit demand index for the third calendar quarter of 2013. The index, which measures the change in credit demand for the September quarter compared to the same period in 2012, showed that overall business credit demand decreased to -0.7% over the past year, a sharp fall from 5.5% in the June quarter.
- Overall business credit growth contracts to -0.7% year on-year, falls from 5.5% in June quarter
- Reduced demand for business credit seen in mining and non-mining states
- Changes to Fringe Benefit Tax may have reduced demand for asset finance
- Appetite for business loans eases while trade credit enquiries decrease
The decrease in overall business credit enquiries reflects decreases over the past year in asset finance (-5.9%) and trade credit (-0.6%), partly offset by a rise in business loans (+3.1%). The deterioration in business credit enquiries has been driven by softening demand in both mining and non-mining states. Growth in overall business credit applications across the non-mining states eased from 6% in the June quarter to 0.1% in the September quarter, while growth in the mining states (WA, QLD and NT) eased from 4.6% in June to 2.1% in September.
“The September quarter was the first contraction in business credit demand since the end of the GFC so it is clear that weak economic conditions and political uncertainty were affecting business confidence. However, low interest rates and a new government appear to be giving businesses greater confidence with credit demand for the month of October looking strong,” said Moses Samaha, general manager of commercial credit risk at Veda.
Source: Veda Press Release – To read the full report click on this link