Business lending was flat in March, month on month, after falling 0.2 per cent in February, and growth in business lending over the 12 months to March 2013 was just 1.6 per cent.Reserve Bank of Australia data released yesterday show that the pick-up in business lending that was emerging in the middle of last year has run out of steam.Westpac's senior economist, Andrew Hanlan, said in a note that the weakening trend was the result of a lack of business confidence.Hanlan said: "Given the high Australian dollar and with a federal election this year, business confidence is lacking."The trend is set to continue, according to Veda, which released its March quarter credit demand index yesterday. Credit demand grew by 2.2 per cent in the quarter, compared with the same period last year.According to the Veda report, the rate of growth in business credit applications has fallen from six per cent in the September quarter last year.Veda's general manager of commercial credit risk, Moses Samaha, said: "Lower interest rates do not appear to be giving Australian business the confidence to take on additional credit. We are witnessing a continued slowdown in the pace of growth of business credit activity."According to Australian Prudential Regulation Authority figures, which were also released yesterday, all the major banks are growing ahead of system. Commonwealth Bank's business loan portfolio grew 10.3 per cent over the year to March 2013; Westpac's grew by 8.3 per cent; NAB's by 6.3 per cent; and ANZ's by 5.8 per cent.Credit demand, by contrast, is stronger across the Tasman. Reserve Bank of New Zealand figures show annualised mortgage lending growth accelerated from 4.3 per cent in February to 4.6 per cent in March, its highest level since December 2008.  Mortgage lending grew by NZ$1.041 billion in March, to $180.42 billion, while farm lending rose $345 million, to $50.350 billion, and business lending fell $184 million, to $78.916 billion. The RBNZ has warned in recent months that a surge in mortgage lending could create a dangerous housing bubble.