Bank and non-bank lending to business continued to contract in August while growth in lending to the agriculture sector slowed, figures released by the Reserve Bank show. Meanwhile, housing credit lending growth accelerated over the month. The Reserve Bank and Treasury are concerned about New Zealand's economy becoming unbalanced with too much investment in farm land, government and property rather than in private businesses and exporting. Agricredit lending rose NZ$319 million, or 0.7%, in August from July, the lowest nominal increase in agricultural credit since February. Year-on-year growth in farm lending slowed further to be up 13.1% in August from 14.4% in July and over 20% between May 2008 and April 2009. Business lending in August 2009 was down 0.3% from August 2008, the first year-on-year contraction in business credit for any month since August 2003. Business lending fell NZ$506 million, or 0.6% from July.
Meanwhile, housing credit rose by NZ$553 million, or 0.3%, in August to over NZ$165 billion. This compared with growth of NZ$337 million in July from June. Year-on-year growth, which had slowed to 2.8% in July, rose slightly to 2.9% in August. Other consumer credit, which includes hire purchase and credit card lending, has also been contracting since December, with lending falling NZ$86 million, or 0.7%, in August from July. Business lending has now fallen 4.3%, or NZ$3.5 billion, since its peak in December. In that same time, agricredit rose 8%, or NZ$3.5 billion, and housing credit rose 2.3%, or NZ$3.8 billion. Other consumer credit was down 6%, or NZ$773 million. You can find all of our sector credit charts here.