A significant drop in credit demand marked the third quarter of 2024, as revealed by the latest Bank of Canada Senior Loan Officer Survey. The survey data, updated on November 15, 2024, shows a stark decline in the credit indicator, which fell from 6.9 in the second quarter to a mere 1.7 by the end of the third quarter.
This shift indicates a cooling in the previous high demand for credit, pointing towards tighter lending conditions or a more cautious economic climate. Stakeholders in the financial sector and potential borrowers will be looking closely at these trends as they can have broad implications for economic activity across the country.
The sharp decline in the demand for credit reflects a potential adjustment phase in the Canadian economy, suggesting either a slowdown in borrower activity or increased caution among lenders. Policymakers and economists will likely scrutinize this data to better understand the factors contributing to this downturn and to update strategies for economic stability.