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PayNet: Canadian Private Sector is Driving Economy, Investment Expanding Broadly

September 13, 2017, 07:07 AM
Filed Under: Economy

PayNet reports that the PayNet Canadian Small Business Lending Index (CSBLI) increased 4% to 126.2 in July 2017 from 121.2 in June 2017.

“Investment to expand is showing broadly across industry segments and provinces at a time when the U.S. is stuck in low gear,” states William Phelan, president of PayNet, Inc. “Over the last year, the Canadian economy has grown in real terms at 3.7% while the US economy grew at just a 2.2% rate in real terms over the same period,”

The Retail sector (5%) and Other sector (10%) showed the largest increases versus last month. Regionally, British Columbia and Atlantic Canada showed the largest increases from June, both up 3%, and no province showed a decrease.

The financial health of Canadian companies continues to improve. The PayNet Canadian Small Business Delinquency Index (CSBDI) 31-180 days past due decreased to 0.97% in July 2017 from 1.09% in June 2017.   Compared to July 2016, delinquency decreased 20 bps.

Agriculture delinquency increased by 17% (9 bps), while every other industry decreased by 9% or more. Every province showed decreases in delinquency. The largest delinquency changes were seen in Quebec with a 15% (20 bps) decrease and British Columbia with a 14% (14 bps) decrease.

PayNet is forecasting overall defaults to decrease 0.3% from 2016 to 2017 with lower defaults in Transportation (-0.9%) and Construction (-0.5%). Agriculture is the industry raising the most concern in Canada with defaults forecasted to increase 0.7% in 2017 and 0.4% in 2018.

“The economy seems to be at the inflection point of expansion at low-risk now, but we could expect increasing financial risk as some of these investments pay off and some fail to achieve their full potential,” Phelan added.

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