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Globe and Mail
10-06-2025
- Business
- Globe and Mail
Debt Pressure Building Up for Canadian Businesses
- Delinquencies climb, credit demand dips, and regional cracks deepen - Equifax ® Canada Market Pulse — Q1 2025 Quarterly Business Credit Trends and Insights Report TORONTO, June 10, 2025 (GLOBE NEWSWIRE) -- After a cautiously optimistic end to 2024, Canadian businesses seem to have entered 2025 with trepidation. According to the Equifax ® Canada Q1 2025 Business Credit Trends and Insights Report, delinquencies are rising for businesses across the country and credit demand is slowing, while key sectors are showing early signs of distress — especially those tied closely to consumer trends, with delinquency rates not seen since 2009. The Canadian Small Business Health Index 1, a benchmark of business credit health and business sentiment, dropped to 99.3 in Q1 2025, a 1.5 per cent decline from the previous quarter. While still slightly above its year-ago level, the dip signals a loss of momentum following gains made late last year. Alongside rising delinquencies, Equifax data shows a noticeable slowdown in credit demand, as fewer businesses applied for new credit in Q1 2025, a decline of six per cent when compared to the same time period in 2024. Lower new originations and growing balances could signal growing caution among small business owners, many of whom could be choosing to manage existing debt rather than take on new risk, even with interest rates easing and inflation stabilizing. "The Canadian Small Business Health Index shows that business sentiment is down three per cent in Q1 2025 compared to the previous quarter," noted Jeff Brown, Head of Commercial Solutions at Equifax Canada. "The early months of 2025 are revealing the pressures the business landscape could be facing. Many businesses are caught in a squeeze from both slowing household consumption on one hand and growing business debt stress on the other." Credit Warning Signs Widen In Q1 2025, over 309,000 businesses — 11.3 per cent of credit active businesses — missed at least one credit payment. This marks a 14.6 per cent year-over-year increase in business delinquencies and highlights the growing financial strain across sectors. _______________________________ 1 The Canadian Small Business Health Index provides a holistic view of Canadian business conditions by combining data collected by Equifax Canada, Business Development Bank of Canada, Statistics Canada and the Bank of Canada. Accommodation & Food Services and Retail Sector Missing Payments The impact is particularly acute in Accommodation & Food Services, where missed payments jumped to 16.9 per cent, and in Retail Trade, where the rate hit 13.2 per cent. Both sectors are likely suffering from weak consumer spending, rising operating costs, and growing household debt levels. Average monthly consumer credit card spend 2 per cardholder fell by 107 dollars during Q1, dropping to the lowest level since March 2022. 'This seems to be a classic ripple effect,' said Brown. 'Equifax data suggests when households pull back, restaurants, retailers and local service providers feel it first — and hardest. This can then travel up the supply chain, where everyone from manufacturers to transport companies feel its effects.' Businesses Prioritize Suppliers Over Lenders Delinquency trends suggest a shift in how businesses are managing limited cash flow. The 60+ day delinquency rate for financial trade (loans, lines of credit) rose from 3.0 per cent to 3.4 per cent, a 15.5 per cent increase year-over-year. In contrast, industrial trade delinquencies (typically money owed to suppliers) rose more modestly, from 5.5 per cent to 5.7 per cent. 'Businesses are paying suppliers, but with little to spare, they may be missing banking obligation payments. This may signal that businesses are strategically recalibrating, with many businesses prioritizing supplier relationships to keep operations moving,' added Brown. Regional Flashpoints in PEI, Quebec, Ontario and British Colombia While delinquencies are rising nationwide, some provinces and industries are flashing red: Ontario and British Columbia led the country in financial trade arrears, up 18.8 per cent and 19.9 per cent year-over-year, respectively. Quebec and Prince Edward Island posted unusually sharp increases in industrial trade delinquencies, up 26.6 per cent and 15.9 per cent year-over-year, respectively, signaling localized stress in supplier-based credit relationships. Certain sectors are showing strain Sectors showing double-digit increases in year-over-year missed payments include Agriculture (+19.5 per cent), Transportation & Warehousing (+19.3 per cent), Real Estate (+17.0 per cent), Finance & Insurance (+16.4 per cent), and Manufacturing (+10.2 per cent). 'Businesses across the country and across a variety of industries are showing increased vulnerabilities as broader economic uncertainty continues,' noted Brown. 'Businesses will continue to need resilience and careful planning to navigate this economic environment.' _______________________________ 2 Average monthly consumer credit card spend comparisons have been adjusted for inflation. Province Analysis - 60+ days Delinquency Rates (Account Level) Province Delinquency Rate : Financial Trades (Q1 2025) Delinquency Rate Change: Financial Trades (Q1 2025 vs. Q1 2024) Delinquency Rate: Industrial Trades (Q1 2025) Delinquency Rate Change: Industrial Trades (Q1 2025 vs. Q1 2024) Ontario 3.71% 18.85% 5.63% 4.97% Quebec 3.49% 13.31% 4.59% 26.55% Nova Scotia 2.47% 1.06% 6.19% 8.05% New Brunswick 2.82% 5.17% 4.73% -6.22% PEI 2.37% 0.34% 4.45% 15.90% Newfoundland 2.71% -1.15% 4.90% -12.19% Eastern Region 3.58% 16.67% 5.21% 12.51% Alberta 3.49% 8.90% 7.07% -13.30% Manitoba 3.10% 16.43% 4.54% -1.60% Saskatchewan 2.79% -0.11% 6.47% 3.36% British Columbia 2.94% 19.93% 6.56% -10.66% Western Region 3.17% 13.00% 6.50% -9.74% Canada 3.44% 15.50% 5.69% 3.52% * Based on Equifax data for Q1 2025 About Equifax At Equifax (NYSE: EFX), we believe knowledge drives progress. As a global data, analytics, and technology company, we play an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technology drives insights to power decisions to move people forward. Headquartered in Atlanta and supported by nearly 15,000 employees worldwide, Equifax operates or has investments in 24 countries in North America, Central and South America, Europe, and the Asia Pacific region. For more information, visit Contact: Andrew Findlater SELECT Public Relations afindlater@ (647) 444-1197 Angie Andich Equifax Canada Media Relations
Reuters
09-06-2025
- Business
- Reuters
China's May lending seen tripling on monetary measures, trade truce
BEIJING, June 9 (Reuters) - China's new yuan loans more than tripled in May compared with a month ago, matching the borrowing appetite in the same period last year, as a temporary trade truce between China and the United States and new government measures helped boost credit demand. Chinese banks are estimated to have issued 850 billion yuan ($118.27 billion) in net new yuan loans last month, according to 18 economists polled by Reuters. April saw 280 billion yuan loans distributed. In mid-May, China and the United States struck a 90-day truce in their bruising tariff war and rolled back most of the triple-digit levies they heaped on each other's goods in early April. Adding to the positive sentiment was Beijing's raft of monetary easing measures last month including interest rate cuts and a major liquidity injection, though Citi Research analysts said the steps may not make an immediate impact on credit demand. "Bills discount rate stayed low in May, and we expect new RMB loans at RMB900 billion, largely in line with last May's level," Citi Research said in a note last week. New yuan loans in May are typically higher than in April as banks begin work to reach their quarterly loan targets. Factory activity at the world's largest manufacturing hub contracted for a second month in May, as trade tensions with the United States remain high and speculation mounts Beijing would roll out further stimulus measures to underpin economic growth. Adding to the external headwinds, frail domestic demand remains a major drag on the world's second-largest economy as households grapple with income pressure and keep a tight leash on spending. A phone call between U.S. President Donald Trump and Chinese leader Xi Jinping on Thursday kept the lid on tensions but left key trade issues such as Beijing's control on rare earth exports and Washington's curbs on chip-related exports to further talks set to take place in London later on Monday. Broad M2 money supply, which measures cash in circulation, and a set of deposits including time deposits to corporates plus household savings, is expected to have increased 8.1% last month, up from the 8.0% in April. Outstanding yuan loans in May were seen matching the pace of growth in April at 7.2% from a year earlier, according to the poll. A broad measure of credit and liquidity that is Total Social Financing (TSF) likely grew to 2.3 trillion yuan in May from 1.16 trillion yuan in April, the poll showed. Any acceleration in government bond issuance could help boost growth in TSF. The measure includes off-balance-sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales. ($1 = 7.1871 Chinese yuan renminbi)
Yahoo
09-06-2025
- Business
- Yahoo
China's May lending seen tripling on monetary measures, trade truce: Reuters poll
By Liz Lee BEIJING (Reuters) - China's new yuan loans more than tripled in May compared with a month ago, matching the borrowing appetite in the same period last year, as a temporary trade truce between China and the United States and new government measures helped boost credit demand. Chinese banks are estimated to have issued 850 billion yuan ($118.27 billion) in net new yuan loans last month, according to 18 economists polled by Reuters. April saw 280 billion yuan loans distributed. In mid-May, China and the United States struck a 90-day truce in their bruising tariff war and rolled back most of the triple-digit levies they heaped on each other's goods in early April. Adding to the positive sentiment was Beijing's raft of monetary easing measures last month including interest rate cuts and a major liquidity injection, though Citi Research analysts said the steps may not make an immediate impact on credit demand. "Bills discount rate stayed low in May, and we expect new RMB loans at RMB900 billion, largely in line with last May's level," Citi Research said in a note last week. New yuan loans in May are typically higher than in April as banks begin work to reach their quarterly loan targets. Factory activity at the world's largest manufacturing hub contracted for a second month in May, as trade tensions with the United States remain high and speculation mounts Beijing would roll out further stimulus measures to underpin economic growth. Adding to the external headwinds, frail domestic demand remains a major drag on the world's second-largest economy as households grapple with income pressure and keep a tight leash on spending. A phone call between U.S. President Donald Trump and Chinese leader Xi Jinping on Thursday kept the lid on tensions but left key trade issues such as Beijing's control on rare earth exports and Washington's curbs on chip-related exports to further talks set to take place in London later on Monday. Broad M2 money supply, which measures cash in circulation, and a set of deposits including time deposits to corporates plus household savings, is expected to have increased 8.1% last month, up from the 8.0% in April. Outstanding yuan loans in May were seen matching the pace of growth in April at 7.2% from a year earlier, according to the poll. A broad measure of credit and liquidity that is Total Social Financing (TSF) likely grew to 2.3 trillion yuan in May from 1.16 trillion yuan in April, the poll showed. Any acceleration in government bond issuance could help boost growth in TSF. The measure includes off-balance-sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales. ($1 = 7.1871 Chinese yuan renminbi) Sign in to access your portfolio
Yahoo
09-06-2025
- Business
- Yahoo
China's May lending seen tripling on monetary measures, trade truce: Reuters poll
By Liz Lee BEIJING (Reuters) - China's new yuan loans more than tripled in May compared with a month ago, matching the borrowing appetite in the same period last year, as a temporary trade truce between China and the United States and new government measures helped boost credit demand. Chinese banks are estimated to have issued 850 billion yuan ($118.27 billion) in net new yuan loans last month, according to 18 economists polled by Reuters. April saw 280 billion yuan loans distributed. In mid-May, China and the United States struck a 90-day truce in their bruising tariff war and rolled back most of the triple-digit levies they heaped on each other's goods in early April. Adding to the positive sentiment was Beijing's raft of monetary easing measures last month including interest rate cuts and a major liquidity injection, though Citi Research analysts said the steps may not make an immediate impact on credit demand. "Bills discount rate stayed low in May, and we expect new RMB loans at RMB900 billion, largely in line with last May's level," Citi Research said in a note last week. New yuan loans in May are typically higher than in April as banks begin work to reach their quarterly loan targets. Factory activity at the world's largest manufacturing hub contracted for a second month in May, as trade tensions with the United States remain high and speculation mounts Beijing would roll out further stimulus measures to underpin economic growth. Adding to the external headwinds, frail domestic demand remains a major drag on the world's second-largest economy as households grapple with income pressure and keep a tight leash on spending. A phone call between U.S. President Donald Trump and Chinese leader Xi Jinping on Thursday kept the lid on tensions but left key trade issues such as Beijing's control on rare earth exports and Washington's curbs on chip-related exports to further talks set to take place in London later on Monday. Broad M2 money supply, which measures cash in circulation, and a set of deposits including time deposits to corporates plus household savings, is expected to have increased 8.1% last month, up from the 8.0% in April. Outstanding yuan loans in May were seen matching the pace of growth in April at 7.2% from a year earlier, according to the poll. A broad measure of credit and liquidity that is Total Social Financing (TSF) likely grew to 2.3 trillion yuan in May from 1.16 trillion yuan in April, the poll showed. Any acceleration in government bond issuance could help boost growth in TSF. The measure includes off-balance-sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales. ($1 = 7.1871 Chinese yuan renminbi) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
09-05-2025
- Business
- Reuters
China's April bank lending seen plunging from a month ago
BEIJING, May 9 (Reuters) - China's April new yuan loans probably shrank significantly from March levels as the trade war with the United States further weighed on the market at a traditionally quiet time of the year, according to a Reuters poll on Friday. Chinese banks are estimated to have issued 700 billion yuan ($96.58 billion) in net new yuan loans last month, less than one fifth of the 3.64 trillion yuan distributed in March, according to the median estimates of 17 economists. Analysts at Citi Research said new credit could be soft for April, calling it a typically "low season" for loan demand. Although, M1 and M2 supply could improve, they said. "Growth of monetary base and outstanding credit is set to jump in April with the low base from financial tightening last April kicking in," Citi said. The data is due to be released from May 10 to 15. Credit demand has fluctuated in the past few months, as borrowers' confidence tracks pledges made by Chinese policymakers to bolster an economy grappling with a prolonged property crisis, high local government debt and deflationary pressures. A tit-for-tat tariff dispute with the United States that escalated last month, on top of already cautious household and business spending, curbed the appetite for credit. China's manufacturing activity contracted at the fastest pace in 16 months in April, after the U.S. tariffs snapped two months of recovery. Still, China kept a growth target of around 5% this year, having promised more initiatives to support consumption. Beijing stepped up efforts to cushion the economic damage caused by the trade war with the U.S. this week, announcing a raft of stimulus measures, including interest rate cuts and a major liquidity injection. The announcements come ahead of a meeting between top U.S. and Chinese economic officials in Switzerland this weekend, seen as an opportunity to begin resolving duties on goods imports between the world's two largest economies that have soared well above 100%. Broad M2 money supply last month is expected to have grown 7.3%, up from the 7.0% in March. Outstanding yuan loans probably rose 7.4% in April from a year earlier, the poll showed, matching the 7.4% pace in March. Total Social Financing (TSF), a broad measure of credit and liquidity, likely grew to 1.22 trillion yuan in April from 5.89 trillion yuan in March, the poll showed. Any acceleration in government bond issuance could help boost growth in TSF. The measure includes off-balance-sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales. ($1 = 7.2478 Chinese yuan renminbi)
