The PayNet Canadian Small Business Lending Index (CSBLI) increased 3% to 119.9 in November 2016 from 116.5 in October 2016. Compared to the same month one year ago, the CSBLI is down 9%. The index has been down year-over-year for 12 straight months after 12 consecutive months of increases.

Expanding sectors of the Canadian economy are found in manufacturing (+5%) and retailers (+4%) year-over-year growth. Absent these sectors, the CSBLI would have fallen even further in November.

Sectors driving the overall decrease are transportation and accommodation & food service businesses declining 21% and 22% year over year, respectively.

The shifting economy continues to be the theme as commodities sectors and regions stabilize and the manufacturers and consumers growing.

“While small and medium sized business investment remains in contraction mode, they stand poised for growth as credit quality remains relatively high,” stated William Phelan, president of PayNet.

The PayNet Canadian Small Business Delinquency Index (CSBDI) 31-180 days past due decreased 2 bps from 1.11% in October 2016 to 1.09% in November 2016. However, compared to one year ago the delinquency rate is up 17 bps. While most industry sectors experienced a modest decline in delinquency, wholesale increased 6 bps and professional services increased 13 bps compared to October.

“Rising loan delinquencies and interest rates mean a slight increase in business defaults to around 2.4% for 2017,” according to Phelan.