Non-financial business credit, Australia

Non-financial business credit is the amount Australian businesses outside the financial sector owe to banks and other lenders, from the Reserve Bank of Australia's table D2 (series DLCACNFBS). The series is seasonally adjusted, includes securitized loans and continues the older business credit series discontinued in June 2019.

It measures bank lending to the productive economy: farms, miners, builders, retailers and service firms. Its growth reflects business investment, working capital needs and the willingness of banks to lend, and it has become a larger share of bank lending in recent years as banks have sought growth outside housing. For the major banks, business lending carries higher margins than mortgages but also higher losses in downturns.

When reading it, note that it leaves out lending to financial businesses such as fund managers and non-bank lenders, which the old business credit series included; that makes it a better guide to the real economy but not comparable with the pre-2019 series. Large corporations can also switch between bank loans and bond markets, so slower bank credit growth can mean companies are borrowing elsewhere rather than borrowing less. The levels are not adjusted for breaks; the 12-month growth series is.

The non-financial business credit is at its highest since the series starts in January 2006. Within ten years, the non-financial business credit beats 100% of readings.

Credit to non-financial businesses, seasonally adjusted, including securitisations.

RBA publishes the non-financial business credit monthly in RBA table D2, in AUD and is seasonally adjusted. Code: DLCACNFBS. Method for the non-financial business credit.