More loans in the eurozoneBanks noticeably expanded their lending to companies in November
Bank lending to companies in the euro zone accelerated in November.
The financial institutions extended 3.1 percent more loans to companies than a year before, as the European Central Bank (ECB) announced on Friday in Frankfurt. This is the strongest increase since mid-2023. In October it was 2.9 percent. In November, the institutes granted 2.9 percent more loans to private households than a year earlier. This is the biggest increase since spring 2023. In October the increase was slightly weaker at 2.8 percent.
Increased borrowing by companies can be a harbinger of increased investment. The currency union’s industry in particular is under pressure due to high US tariffs and weaker demand from China. It can really use some fresh impetus: its purchasing managers’ index fell by 0.8 to 48.8 points in December. This is the lowest level in nine months, as the financial services provider S&P Global announced in its company survey. The barometer therefore remains below the 50.0 mark, from which it signals growth. “Demand for industrial products from the euro zone is slowing again,” said Hamburg Commercial Bank chief economist Cyrus de la Rubia. “Significantly fewer orders, declining order backlogs and ongoing inventory reductions are the most obvious indicators of this.”
