Consumer credit demand surged 9.4% last month, Centrix reveals.
This reflects more mortgage applications and a spike in personal loans.
The credit research firm’s January Credit Indicator revealed that surging credit demand was partly offset by mixed credit arrears figures and rising business liquidations.
“Arrears on the consumer side continue to follow the seasonal patterns. But that’s 0.8% down on last year. So that’s a really good sign that the tides are starting to turn, which is fantastic,” Centrix chief operating officer Monika Lacey said.
New household lending climbed in the December quarter, with new mortgage lending jumping 14% and non-mortgage lending up 12%.
Company failures climbed to their highest annual level since 2010, with liquidations surging unevenly across sectors, with hospitality up 50%, retail trade 34%, and transport 27%, driving most of the increase.
“On the business side, they’ve also seen an increase in demand, but liquidations have definitely hit their highest peak since 2010, largely impacted by hospitality, retail, transport and construction, and this is largely as a result of IRD (Inland Revenue) increasing their activity following a softer approach over the Covid time,” Lacey said.
Liquidations also rose in construction (up 13%), manufacturing (up 12%), and property/rental (up 17%), despite declining credit defaults and improving average credit scores in many sectors.
Meanwhile, agriculture proved the most resilient sector, with liquidations dropping 11% year-on-year amid stronger credit demand and better financial health.
“Agri has definitely had a bit of a turnaround. There’s been a lot of positive news in the agricultural sector. So long may that continue.”
“We’re hearing a little bit more about other good economic signals filtering through onto the market, so I think we are starting to see some signs of recovery.”