Consumer sectors are currently driving growth with accommodation and foods (4.6%), retail (5%), transportation (7.2%) and construction (7.3%) indicating consumers have more discretionary money to spend.
“After four months where small business was running in retreat, this month’s report illustrates that investment by small businesses rose sharply and that they are back in the game,” said William Phelan, president of PayNet.
Financial conditions improved for small businesses in February with a surprising decrease in loans past due. The Thomson Reuters PayNet Small Business Delinquency Index 31-90 days past due fell two basis points to 1.20%. Sectors deteriorating include agricultural (.25%), construction (.19%) and transportation (.56%). Default outlook remains low given the tepid investment and conservative approach to expansion small businesses have taken.
According to PayNet, the business cycle remains intact with expansion at low risk. The moderate credit cycle continues, even with rises in some of the more economically cyclical sectors like transportation. PayNet’s data predicted a slow plodding economy earlier this year, and continues to see it proceed on the same path.
“The good news is that once uncertainties pass, small business is poised for more expansion because their credit quality remains high,” said Phelan.
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