Commercial and Industrial Credit Markets lending volume continued on the decline through Q3 2009. Peaking at nearly $1.7 Trillion in total monthly activity in the second half of 2008, the lending activity has dropped to $1.4 Trillion in total monthly activity and appears poised for continued reductions based on the short-term 3/12 and 12/12 trend lines.
The above graphic paints a clear picture in terms of lending volume. Perhaps more importantly, it paints a clear picture in terms of recovery in the Commercial and Industrial Credit Markets. More specifically, the declining lending volume (green line) between January 2001 and January 2005. At the beginning of this period, we see similar short-term rates of change in the 3/12 and 12/12 lines (orange and grey) to those that we are currently experiencing. In 2002, we saw a leveling of these short-term rates of change and the markets took nearly 3 years to show any signs of growth in lending volume. Nearing the end of 2009, we have yet to see a leveling of these short-term rates of change.
Based on the previous drop and recovery in Commercial and Industrial Credit Markets between 2002 and 2005, SDR predicts a similar leveling and recovering of lending volumes starting in 2010. Unfortunately for Commercial and Industrial borrowers it may take 3 years, or more, to see any growth in lending volumes.