Borrowing by Canadian Firms Static in March

Figures released Tuesday morning showed that lending to small Canadian businesses was little changed in March from the month before, though borrowing by medium-sized companies jumped as they benefited from a recovery in the energy sector.

The PayNet Small Business Lending index inched up to 118.0 in March from 117.9 in February, while the index for medium businesses rose to 243.1 from 232.6.

PayNet officials said they were surprised by the rate of acceleration for medium-sized firms, with lending activity up 12% compared to the year before. They added that, as larger firms invest in energy projects in the western part of the country, small companies should eventually benefit from that

In oil-rich Alberta, lending activity picked up to 168.6 from 168.0.

However, manufacturing continued to be a weak spot, declining to 59.0 from 62.1. Some economists had expected the sector would help bolster the economy as companies benefited from the lower Canadian dollar and oil prices.

The number of small businesses, 30 days or more behind on their loans, edged down at 1.1% from 1.11% , while those 90 days or later held steady at 0.35% for the third consecutive month.