LOANS TO the manufacturing sector have fallen in value by more than a third over the last two years, while lending to hotels and restaurants is down by a quarter, new figures from the Central Bank show.
The latest credit data points to a €1.9 billion decline in loans to businesses outside the financial and property sectors during the third-quarter of this year.
On an annual basis, lending to this part of the economy declined by 17.8 per cent, with the manufacturing sector particularly affected.
Since a peak in the second-quarter of 2008, outstanding lending to hotels and restaurants has fallen by 23 per cent, while loans to manufacturing companies are 35.5 per cent lower.
The Central Bank noted that “movements in impairment provisions” had affected the figures.
Excluding these, the underlying decline in credit to non-property, non-financial business sectors in the third-quarter was estimated at €1.1 billion, or 2.3 per cent. Over the first three-quarters, on this basis, €3.9 billion in lending to non-property, non-financial businesses has been stripped away since the start of this year.
Loans to the electricity sector weakened by 41 per cent, and lending to transport, storage and communications companies was 8.5 per cent lower.
The property downturn saw a continuing drop in lending to the sector, with credit outstanding down by €8.9 billion, or 11 per cent, in the third-quarter. Much of this was driven by transfers to Nama and impairment charges; stripping out these factors left an underlying decline of €1 billion or 1 per cent between July and September this year.
Mortgage lending also fell, dropping by €540 million, or 0.4 per cent, on the previous quarter when securitisations are included. On the same basis, personal loans other than mortgages were €415 million lower.
