Lending activity to Canadian small businesses decreased in September. Conversely, borrowing picked up for medium-sized companies, a report showed on Thursday. The results suggest that overall economic conditions were improving.
The PayNet Canadian Small Business Lending Index fell from 119.7 in August to 117.7, posting a drop after increasing for the previous two months.
Alternatively, the gauge of lending increased to 224.1 from 219.3 at medium-sized companies. Lending also increased by 5 percent compared to a year before, the index's first year-over-year increase since June 2015.
Canada's economy was in a brief recession last year after being hit by the drop in oil prices and reduced investment in the energy sector has hindered smaller businesses.
September's increase in manufacturing sector lending and in the oil-sensitive province of Alberta suggested the economy was adapting, commented PayNet President Bill Phelan.
He said: "It seems like a little bit of a setback, but the reality is things are looking much more positive.”
Lending to small businesses picked up in Alberta, which has heavily impacted by the oil price slump, with the measure rising to 165.0 from 164.4.
Ontario, which had been helping to drive business growth, edged downward to 150.0 from 152.7.
Lending activity to small manufacturing firms increased from 65.2 to 65.8. The accommodation and food industry, which had been strong as the lower Canadian dollar attracted tourists, declined to 232.3 from 242.4.