Monday, January 25, 2010

C&I Heading D&O

Looking at the latest weekly reading of total commercial and industrial (C&I) loans, it appears that financing for retail, wholesale, industrial and manufacturing firms is fully in decline.

In fact, the latest results show that total C&I loans dropped at an annual rate of 16.67%, nearly the largest annual decline in at least the 34 years that loan statistics have been tracked.

Looking at past recessionary period contractions of commercial lending it’s easy to see that C&I lending could continue contracting for many years to come.

What is not as obvious is the effect of this decline which may remove $500 billion (30% decline from peak) in financing from firms over the next few years.