Business lending down in February

Tuesday, 17 Apr 2012

Business lending declined in February, latest figures from the Australian Bureau of Statistics (ABS) show.

During the month, the value of total commercial finance commitments declined 2.8 per cent, while revolving credit commitments saw an 8.1 per cent decline.

This indicates further problems for commercial lending, as a decline was also noted in January.

The seasonally adjusted value of total commercial finance commitments marked a 1.5 per cent fall in January, although the situation worsened in February with an 8.4 per cent drop.

Better news was seen among fixed lending commitments, which fell 0.7 per cent in February compared to 2.3 per cent in January.

Some improvements may start to arise over the coming months, as a recent report from NAB shows that financial markets are gradually beginning to stabilise.

The bank acknowledged a number of changes that had improved sentiment, including a cash injection from the European Central Bank and the positive impact it had on the financial system.

NAB also identified that despite a fall in confidence across the industrial sector last year, the situation has now started to improve indicating the slowdown may be coming to an end.