An increase of 4.0% in loans made to businesses from October to November is seen by economists as yet another encouraging sign of the sustainability of Australia’s economic recovery.

The figures were released by the Australian Bureau of Statistics along with others reporting an increase of 1.1% in personal finance, which includes all forms of loans made to individuals. Credit card lending and other forms of revolving credit, a subset of personal finance, gained by 2.5% between October and November.

While it’s true that the month-to-month figures tend to fluctuate, such large gains in personal and commercial finances support the picture of an economy recovering, with businesses looking to expand and shoppers making purchases, rather than waiting for conditions to improve or depending upon government stimulus funds. Combined with recent improving results in economic readings such as retail sales, consumer and business confidence, and international trade, all signs seem to indicate the recovery can sustain itself, without needing additional boosts from the government.

“In past reports we’ve actually highlighted the weakness in commercial borrowing,” said Savanth Sebastian, an economist with CommSec. “[Y]ou need to see an improvement in commercial finance to have a sustained economic recovery.”

Source: abc.net.au