Market uncertainty behind drop in business credit applications

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Loans for asset finance rose 4.8 percent, and other types of business loans rose 2.9 percent.
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Business credit applications fell in the last quarter of 2023, though demand from the hospitality, accommodation and transport sectors remained strong.

Total business credit applications fell 1.3 percent in the fourth quarter ended December on the year earlier, led down by a 9.6 percent drop in trade credit applications.

“It just tells us there’s a lack of demand there in trade credit,” Equifax New Zealand spokesperson Nick Foster said, adding those types of credit applications were for such things as building materials and the like.

On the plus side, loans for asset finance rose 4.8 percent, with other types of business loans up 2.9 percent.

Foster said the varied results across commercial credit portfolios and industries reflected ongoing market uncertainty.

“As expected, demand was soft in December specifically but overall the quarter was relatively stable.

“Food services, accommodation and transport are performing strongly in general, while agriculture, forestry and farming was quite soft throughout 2023, ending 4.7 percent down year on year in Q4.”