12:44 03 May 2013
In the latest economic news, construction work has decreased by 2.5per cent. It will be interesting to note if the current attempts to attract foreign students from Mexico and Columbia, as well as an expected influx of immigrants, can help stimulate the economy.
The status of loans may be an adequate way to gauge the relative health of the economy for a few reasons:
• Loan payments—the percentage of loans which have been paid on time will indicate the financial status of the general working class. Missed loan payments and repossessions indicate issues with the economy such as wages, benefits gaps.
• Growth—if there is one thing that may come of immigrants and foreign students it may be a renewal of the construction industry to build new flats and homes. There will be more loans requested in the housing market. An increase in the number of loans means the economy is stable enough that the working class is able to repay loans and has adequate funds to do so.
• Loan practices—as long as loans are fairly assessed to individuals and businesses the number of new loans is good indicator of the financial health of an economy. If loans are given more to high-risk candidates, it’s a sign that banks aren’t obtaining enough business elsewhere and are willing to take that risk.
• Types of loans—loans for construction, mortgages, and vehicles are all positive indicators, but consolidation loans, and reverse mortgage loans would indicate financial instability.
Through the types and number of loans, we’ll be able to see a little bit of how the economy is doing.
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