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A consumer pays with a credit card at a store in Montreal in this file photo.Ryan Remiorz/The Canadian Press

Things appear to be falling into line where consumer and business credit is concerned.

Consumers continue to pull back on their nasty levels of borrowing, while financing in the corporate sector is surging, according to a study released Tuesday by Royal Bank of Canada.

All of this will, of course, have an impact on the economy, though in different ways.

"The sustained moderation in household debt growth continues to be welcomed with open arms by policy makers as it helps to stem concerns that Canadian consumers are overextending themselves and exposing the financial system to heightened risks," said RBC economist David Onyett-Jeffries.

He was referring to the constant urging by Bank of Canada Governor Mark Carney, and several moves by Finance Minister Jim Flaherty to tame the mortgage market amid record levels of household debt to disposable income.

"The offshoot to consumers scaling back their demand for credit, however, is a more moderate contribution to overall growth from the household sector, with the pullback likely most evident in the expected slowing in housing market activity over the coming year," Mr. Onyett-Jeffries added.

Household debt, he calculated, stood in February at 4.5 per cent above the level of a year earlier, down from growth of 4.7 per cent in the same month a year earlier.

And, notably, the slowest annual pace since June, 2001.

On the corporate front, meanwhile, financing surged 7.9 per cent from a year earlier, the fastest pace in five years and far beyond its long-term average of 5.3 per cent, he added.

"The improving global economic outlook and highly accommodative financial conditions in Canada continue to support further acceleration in business credit growth," said Mr. Onyett-Jeffries.

"The pickup in business financing growth against the backdrop of low interest rates and healthy corporate finances remains consistent with our view that Canadian firms will continue to increase capital investment throughout 2013," he added in the report.

By the numbers:

  • Residential mortgage debt in February was $1.16-trillion, up 5.4 per cent, the slowest rate since November 2001.
  • Credit card, personal loan, lines of credit and other non-mortgage debt climbed 2.5 per cent, the slowest since July, 1993.
  • Short-term business credit hit a record $395-billion, up 12.4 per cent and the fastest since March, 2008.
  • Long-term financing climbed 6.3 per cent. That was the same as the January level, which, in turn, was the fastest since May, 2010.

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