Borrowing by U.S. small businesses rose in January, another sign that recent stronger economic data may be more durable than thought. The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, jumped 18 percent in January from a year earlier, marking its 18th consecutive double-digit rise.
Recent upbeat data on employment, manufacturing and overall growth has caused
analysts to temper earlier expectations of a sharp pullback in growth this quarter. First-quarter GDP growth is seen between 2 and 2.5 percent. The economy grew at a 3 percent annual rate last quarter, the government reported on Wednesday. The PayNet survey suggests growth could continue, at least for the next few months. PayNet tracks borrowing by millions of small U.S. businesses, and the index is correlated with changes in U.S. gross domestic product a quarter or two in the future.
Small businesses historically account for a disproportionate share of jobs growth, although a shift to the service sector in the last decade means that investment at small firms these days does not reverberate through the labor market the way it did when more of them were manufacturers.
Separate PayNet data suggested small businesses are paying back their debts with relative ease.
Accounts in moderate delinquency, or those behind by 30 days or more, rose to 1.57 percent in January, from 1.55 percent in December. That’s still far below the high of 4.42 percent reached in May 2009 and consistent with continued low risk of default.
Accounts 90 days or more behind in payments, or in severe delinquency, fell to 0.37 percent in January, a record low, from 0.38 percent in December.
Accounts behind 180 days or more, or in default and unlikely ever to be paid, fell to 0.51 percent in January, from 0.54 percent in December.
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