Commercial and personal finance commitments fell in November, according to the latest figures from the Australian Bureau of Statistics.
The figures show business lending fell by a seasonally adjusted 9.6% to $33.09 billion, down from $36.62 billion in October.
Personal finance also fell down 7.8% to $6.1 billion, while finance for the owner occupied housing market grew by 2.2% to $13.7 billion.
Revolving credit commitments fell by 17% in November, on seasonally adjusted terms.
European bailout fund gets downgraded
Following its downgrade of several Eurozone countries late last week, ratings agency Standard & Poor's has downgraded the rating of Europe's bailout rescue fund, the European Financial Stability Facility (EFSF).
EFSF is now rated AA+, down from AAA-. The rating downgrade was expected, as EFSF's rating relies on the ratings of its member countries.
"Following the lowering of the ratings on France and Austria, the rated long-term debt instruments already issued by the EFSF are no longer fully supported by guarantees from the EFSF guarantor members rated 'AAA' by Standard & Poor's, or 'AAA' rated liquid securities," S&P said in a statement.
"Instead, they are now covered by guarantees from guarantor members or securities rated 'AAA' or 'AA+'."
The new rating could limit the ability of the EFSF to raise cheap bailout money.
Shares rise after European rally
The Australian sharemarket has opened higher this morning despite a number of downgrades in the Eurozone, with offshore rallies boosting local investor confidence.
The benchmark S&P/ASX200 index was up 39 points or 1% to 4186.8 at 12.00 AEST, while the Australian dollar was up to $US1.03c.
AMP shares rose 0.95% to $4.27 as Commonwealth Bank shares rose 0.57% to $49.79. NAB rose 0.58% to $23.54 as Westpac rose 0.59% to $20.49.
In the United States, the Dow Jones Industrial Average lost 49 points or 0.4% to 12,422.
Australian manufacturers locked out of mining contracts
Australian miners are being pressured to buy Chinese-made equipment as a condition of their export contracts, according to anecdotal evidence presented to the Gillard Government.
A report in this morning's The Australian newspaper says the Australian Industry Group made its concerns known to the Government in its submission responding to government moves to increase local participation in large mining projects.
The Australian Manufacturing Workers Union's acting national secretary Mike Nicolaides seconded the claims, saying pressure to use overseas suppliers was "certainly not unknown to us in the mining industry".
A spokesman for Industry Minister Greg Combet said that while the Government had heard similar stories from a number of groups, it would wait on concrete evidence before investigating.
Gillard attacks coalition on economy
Prime Minister Julia Gillard has said the Opposition is being "deeply irresponsible" by claiming the Australian economy is weak.
During a tour of the Ford plant in Melbourne, Gillard said coalition finance spokesman Andrew Robb was engaging in "deeply irresponsible conduct".
"We are at a time in the global economy where there is volatility out of the eurozone," she said.
"That means that markets are skittish. That means it's an incredibly dangerous time for people to be spruiking nonsense about the Australian economy, and that's what Mr Robb has been doing – talking our economy down."
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