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PayNet: Canadian SBLI Shows Originations Declining

April 19, 2016, 07:00 AM
Filed Under: Industry News

PayNet reports that the PayNet Canadian Small Business Lending Index (CSBLI) shows that originations decreased 3% from 127.0 in January 2016 to 123.5 in February 2016. Compared to the same month one year ago, the Index is down 6%.
“This report shows the Canadian economy in an extended downturn,” states William Phelan  president of PayNet, Inc. “In a surprise, small businesses pulled back sharply on investment in capital expansion.”
More Industry sectors are trending towards slowdown rather than strength. Accommodation & Food is falling from a +8% rate to +3%. Agriculture at -3% is still decreasing. Another cautionary sign is found in transportation investment falling -12%. Wholesale trade reflects declining commodity prices, down -15%.
“Overall, the consumer is not picking up the where oil is leaving off. The energy break is not turning into consumer spending,” Phelan added.
The only good news can be found in construction at +2%, and some moderate good news is seen in manufacturing at +8%.

Province data illustrates the same story; the downturn continues in Alberta at -21%. Atlanta Canada represents one province with continuing strength at +13%. The strongest regional economy of British Columbia shows investment grew +3%. Manitoba shows a scant 1% and a loss of strength is occurring in Ontario falling to a +8% increase. Quebec remains strong acting as a growth engine for the economy at +15%. Saskatchewan is not yet showing signs of expansion at only +2%.

National loan delinquencies reflect moderately rising financial stress among Canadian businesses. PayNet Canadian Small Business Delinquency Index 31-180% increased 5 bps from 1.02% in January 2016 to 1.07% in February 2016. Delinquency in Accommodation/Food, Manufacturing, Transportation, and Wholesale all increased by at least 10% from January 2016. With the exception of Manitoba (1-bp decrease), every region's delinquency increased, including Quebec by 15 bps (12%).


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