PayNet reports the PayNet Canadian Small Business Lending Index (CSBLI) fell 1% to 116.1 in February 2017 from 117.2 in January 2017. Compared to February 2016, the Index is down 7%.
“While a down month for small businesses, at least we can see the trend in contractions lessening,” states William Phelan, president of PayNet, Inc.
The sectors and provinces where originations growth have been relatively stronger appear to be those with some exposure to the mining industry. Transportation and Wholesale Trade have been the strongest sectors over the last three months, with increases of 2% and 3% from January to February. Additionally, the sector that includes mining, oil and gas – Other Industries – has seen growth accelerate in recent months, with a 2% increase from January to February. Furthermore, Alberta and Saskatchewan have been the two strongest provinces in terms of originations growth in the last three months and they are the provinces with the highest exposure to the oil and gas industry.
In terms of originations growth, relative laggards by industry segment have been Manufacturing (-1%) and Retail (-2%) and on provincial basis Atlantic Canada (-1%) and Quebec (-1%).
The PayNet Canadian Small Business Delinquency Index (CSBDI) 31-180 days past due held steady at 1.11% from January 2017 and was up 4 basis points compared to February 2016. Retail delinquencies increased 8 bps while Transportation delinquencies declined 4 bps from January 2017 to February 2017.
Delinquency trends are becoming somewhat concerning in Ontario, Manitoba, Quebec, and Atlantic Canada with delinquency rates increasing 14 to 18 bps over the past 3 months. Interestingly, while overall delinquency rates fell in British Columbia over the last three months by 10 basis points, the serious delinquency rates are up 4 basis points. This indicates some signs of concentrated weakness in the province.
“While small businesses contracted, one good sign is medium-sized Canadian businesses expanded last month, for only the 3rd time in the last twenty months,” Phelan added.