Canadian Private Businesses Poised for Turnaround, According to PayNet
Canadian Small Business, Canadian Investment
TORONTO – July 16, 2018 – PayNet, the leading provider of small business credit data and analysis, reports that the PayNet Canadian Small Business Lending Index (CSBLI) increased 4% from 121.9 in April 2018 to 126.7 in May 2018, marking the fifth consecutive month of growth. Compared to the same month one year ago, the index is up 4%.
“This latest release confirms the past year to be more of a pause, rather than a major change in the Canadian business cycle,” said PayNet President William Phelan. “On a year-over-year basis, the index showed positive growth after 10 months of decreases.”
Borrowing and investment were up year-over-year in Transportation (3%), Retail (2%) and Accommodation and Food (2%), while Professional Services (-4%) was down. All other industries moved less than 1%. Six of the seven provinces were up or flat, with Atlantic Canada (2%) and British Columbia (2%) seeing the highest year-over-year increases. Only Saskatchewan (-2%) was down during that period.
Industry sectors and provinces are showing improvement in credit quality. According to the PayNet Canadian Small Business Delinquency Index (CSBDI), loans 30 days past due or more again held steady at 0.93% from April to May this year. Compared with May 2017, delinquency decreased 16 bps from 1.09%, marking the fourteenth consecutive year-over-year decrease after 25 months of year-over-year increases. Month-over-month, Accommodation and Food (-19 bps) and Retail (-7bps) showed the largest delinquency decreases. The most significant delinquency increases were in Manufacturing (6 bps) and Professional Services (4 bps). Quebec (-5 bps) showed a decrease in delinquency, but delinquency increased in Ontario (2 bps) and Saskatchewan (4 bps).
“Prior to 2017, Canadian businesses invested aggressively to take advantage of perceived opportunities,” added Phelan. “While they may have overreached a bit, they have self-corrected by holding back on investment. Decreasing investment combined with improving credit quality shows that Canadian businesses needed to regroup. Now with those consolidations behind them, they are poised for a turnaround.”
About PayNet, Inc. Canada
PayNet, Inc. Canada is the premier provider of risk management tools and market insight to the commercial credit industry, collecting real-time loan information from leading Canadian lenders and turning it into actionable intelligence. The company's proprietary database -- updated weekly -- is a growing collection of commercial loans and leases, worth over $92 billion. Using state-of-the-art analytics, PayNet converts raw data into real-time market intelligence and predictive information that subscribing lenders use to manage risk, lower operating costs, originate more loans and improve their business strategy. For more information visit paynet.ca and sbinsights.ca.