Business credit demand picked up in the December quarter, but there are still plenty of COVID-related mixed signals in the data.

According to the latest Equifax Quarterly Business Credit Demand Index, business credit applications were up 9.7 per cent in the quarter, compared with the December quarter 2020.

Business loan applications increased 19.6 per cent over the period and trade credit applications were up 3.3 per cent.

Asset finance applications fell 3.5 per cent. Some of the numbers are volatile and reflect the ongoing impact of COVID. Quarter-on-quarter, asset finance was up 8 per cent.

Equifax said it was the third straight quarter of growth in business credit demand.

Among industry sectors, the strongest growth in business loan applications was in the accommodation and food services sector, with applications up 33 per cent year-on-year. Applications in retail trade were up 18 per cent, manufacturing 9 per cent and construction 8 per cent. 

Equifax general manager commercial and property services, Scott Mason, cautioned against too much optimism. The impact of Omicron would show up in the March quarter data. So far, data for January show a sharp fall in commercial inquiries.

Business insolvencies in the December quarter were up 13 per cent year-on -year and 8 per cent quarter-on-quarter.

Mason said the construction industry was the key driver of insolvencies, with a 29 per cent increase year-on-year.