Credit demand from businesses has perked up in an indication that the economy could be heading for better times.
That's the assessment of credit data provider Veda after its business credit demand index rose by annual rate of 2.4 per cent as of the March quarter and following a soft result three months earlier.
Business loans jumped 7.8 per cent, the strongest pace since December 2013, while asset finance applications rose 2.2 per cent - the first increase since June 2013.
However, this was partly offset by a 2.6 per cent decline in trade credit applications.
Veda's general manager for commercial credit Moses Samaha says its credit demand index has historically proven to be a lead indicator of how the overall economy is performing.
He said the non-mining states of NSW, Victoria and South Australia, as well as the ACT, performed strongly in the March quarter.
"However, despite these promising signs, business investment is being held back by soft business credit growth in the mining states," he said on Wednesday.
Share
