The lender tips business credit growth of 3 to 4 per cent this year as students and visitors return, down from 14 per cent last year when inventory levels surged.
Westpac says business lending growth is set to slow sharply to between 3 and 4 per cent this year, down from the 14 per cent growth recorded last year, but will still be supported by higher-than-expected net migration this year from the return of international tourists and students.
Amid soft consumer sentiment – which is likely to remain depressed as mortgage repayment costs increase – SMEs should “deplete some of that inventory, and that is an area we will need to watch closely,” he said, given it could reduce demand for working capital. In a strategic move to get more credit to small borrowers faster, Westpac is partnering with Sydney-based artificial intelligence company Rich Data Co and using its machine learning technology to predict customer cash flow.
Businesses also want funds to bring advanced manufacturing processes onshore, he said, also driven by concerns over the security of global supply chains.Such drivers will help to offset more cautious consumers. Westpac’s closely watched index of consumer sentiment, released on Tuesday, rose by 5 per cent month-on-month in January, to 84.3 points.
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