The reduction in interest rates over the past few years has been assisting in rebalancing activity towards the non-mining economy, which is currently growing at around its long-run average rate (Graph 3). The depreciation of the nominal exchange rate since early 2013 has also supported activity in the ‘other tradable’ sector.
However, while credit concerns are real, the weakened state of the economy and the resulting drop in demand for their products and services appear to be the more serious challenge for small businesses in the current environment.