COMPANIES have become the biggest drivers of credit in the market as they expand their capacity for the 2010 soccer World Cup and to take advantage of increased spending on infrastructure.

October's DI900 data submitted by the banks to the Reserve Bank show a surge in credit demand from companies between January and October, with demand from individuals starting to wane slightly.

This is backed up by data issued last week showing a higher-than-expected 7,5% rise in manufacturing production in the year to October, with strong domestic demand and a weak rand helping the industry stay competitive. Manufacturing growth also benefited from spending on fixed-investment projects.

Outstanding corporate credit card debt surged 114% in the year to October to R1,88bn. Corporate overdrafts rose 30% to R67bn and other loans to nonfinancial companies and close corporations grew 27% to R145bn.

Efficient Group economist Nico Kelder said company debt's rate of increase rose significantly. "If you look at total companies debt, the rate of credit increase at the beginning of the year was 3,6% year on year, and now its at 28,2%," Kelder said. "Nonbank financial companies increased their debt accumulatively from 13,7% in January to 34,8% year on year in October."

Kelder said the rate of increase in credit for individuals slowed marginally from 30% in January to 29,3% in October.

Higher investment was behind the increase in corporate debt. "You can see it in the (gross domestic product) data where real fixed capital investment increased by about 18,75% in the third quarter of the year," Kelder said.

While the Reserve Bank has expressed concern at the rate of growth in individual credit, Kelder said the rise in corporate debt could be viewed as positive as it was being used to expand production, which would result in economic growth.

Continued investment ahead of the World Cup would lead to further demand and bode well for manufacturing.

While credit demand from individuals was beginning to slow, Kelder said it would take a while before the full effect of this year's interest rate increases resulted in significantly slower household spending.