Figures from the Reserve Bank of Australia today show annual credit growth has slowed to a 17 year low in November. Credit growth for the 12 months to November 2009 was just 0.8%.
Business credit contributed the most to the fall, falling 8.2% in the past year. While many business have sought other means of raising funds such as going to shareholders cap in hand, this reversal in growth may impact jobs in 2010.
Westpac Economics reported “The weak demand for business credit has taken annual growth in business credit to minus 8.2 per cent, which is the lowest annual growth in business credit in modern history, exceeding the early 1990s downturn.”
Housing credit has grown sightly from lows in April and May, fueled by emergency low interest rates and the First Home Owners boost.
Falls in demand for personal credit is starting to slow, possibly due to increased consumer confidence.