Canada's biggest bank revealed that Canadian household and business credit each took a break from their respective growth trends in March, with the year-over-year increase in both aggregates holding steady at the previous month’s rates.
Experts at RBC Economics conducted an analysis of credit growth nationwide, and reported that total household credit outstanding was up 4.4% over the 12 months ended March, an unchanged growth rate from the previous month but down from 5.6% in March 2012.
Total business financing expanded by 7.9% on a year-over-year basis in March, matching the rate recorded in February but well above the 4.7% pace in March of last year.
RBC maintains that "the steady rate of year-over-year growth in both Canadian household and business credit in March likely only represents a brief respite from the firmly entrenched diverging trends rather than an inflection point in each respective credit cycle. The indications of a further moderation in housing market activity support our view that demand for housing, and consequently demand for mortgages, will weaken slightly throughout 2013 as the Canadian housing market continues to transition to lower, more sustainable levels.
"As well," the bank concludes, "the improving economic backdrop and accommodative financial conditions should support a pickup in business investment activity, which in turn supports our view that business financing growth will remain elevated over the near-term."
