Statistics released today show cautious consumers dropping personal finance commitments but strong borrowing in the commercial sector pushing total lending finance up by 7.6% to $72.9 billion in June, the highest since January 2008.
Personal loans in Australia fell 1.8% in to $8.505 billion in June compared to May, according to the Australian Bureau of Statistics.
And personal revolving credit fell 3.3% and fixed lending commitments also down 0.6%.
However, commercial finance rose 12.1% to $46.495 billion and housing finance for owner occupier was up 1.8% $17.070 billion.
Commsec chief economist Craig James says lending has returned to levels prior to the global financial crisis.
“In fact, in original terms, lending totalled $84.1 billion in June 2014, the second highest total on record behind June 2007 ($90.8 billion),” he says.
“While growth is being driven by business lending, both personal and housing loans are well up on a year ago.
“Simply, consumers and businesses are embracing cheap financing. And hopefully in the case of business, some of the extra dollars are being put to work in new investment, in turn leading to the hiring of more staff.
James says the importance of the data lies in what it reveals about the appropriateness of interest rate settings, confidence and spending levels in the economy.
Official interest rates are at record lows of 2.5%.
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