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The PayNet Small Business Lending Index rose to 123.8 in June
from 122.0 the month before, while the annual gain accelerated
to 5 percent from 3 percent in May.
"This looks like a very positive report for the Canadian
economy," said PayNet President Bill Phelan. "These privately
held companies are driving healthy growth in the Canadian
economy and it's broad-based growth."
The index of lending to construction companies rose to 145.3
from 140.2 as groundbreaking on new homes has been strong this
year, despite signs of cooling in some parts of Canada's housing
market.
Retail and transportation sector lending also climbed, but
manufacturing dipped for a second straight month.
Diversification across industries will make the economy "more
resilient through economic cycles," while growth in both the
west and the east of the country adds to the strength of the
data, Phelan said.
Lending increased in Ontario, Quebec, British Columbia and
Alberta, the country's four most populous provinces.
Strengthening of the domestic economy prompted the Bank of
Canada to raise interest rates last month for the first time in
nearly seven years. The central bank expects the economy to grow
at a 3 percent annualized pace in the second quarter after a 3.7
percent first-quarter expansion.
Lending to medium-sized business dropped in June and the annual
rate slowed, but the pace was a still-solid 3 percent.
The financial health of Canadian companies continued to look
strong, with the share of small companies that were behind 30
days or more on their loans holding steady at 1.09 percent.
Those that were 90 days or more in arrears also held steady, at
0.32 percent.
(Reporting by Fergal Smith; Editing by Leslie Adler)
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