FREE SUBSCRIPTION Includes: The Advisor Daily eBlast + Exclusive Content + Professional Network Membership: JOIN NOW LOGIN
Skip Navigation LinksHome / News / Read News


PayNet: U.S. Small Business Remains Cool on Investment

May 05, 2017, 07:03 AM
Filed Under: Economy

The March 2017 release of the Thomson Reuters/PayNet Small Business Lending Index (SBLI) continues to show small businesses cool towards real expansion as the Index increased just 4% to 134.0 from 128.9 in February 2017. The SBLI is down 1% from March 2016.

“The environment remains wait-and-see, which is certainly an improvement from the middle of 2016 when small businesses pulled-back,” states William Phelan, president of PayNet, Inc.

Arts, Entertainment & Recreation continues to grow at a double-digit rate year-over-year (13.6%). Administrative & Waste Services and Construction also continue to benefit from the generally constructive domestic economy with year-over-year growth rates of 4.8% and 4.3%.  Accommodation & Food Services has experienced revived growth after a year in the doldrums with 2.1% month-over-month increased investment.

Transportation (-15.4%), Agriculture (-7.8%), and Mining, Oil, & Gas (-8.9%) are three of the weakest sectors that are starting to bounce back, although all three are still decidedly in the negative territory. The rate of contraction is accelerating in Healthcare (- 13.1%), largely due to continued political uncertainty.

Small business financial health remains positive. The Thomson Reuters/PayNet Small Business Delinquency Index (SBDI) remains flat in March 2017 at 1.34% from February 2017. Construction (1.93%) and Transportation (1.73%) exhibited the highest delinquency rates.  All the industry segments had higher delinquencies year-over-year with the greatest increases in Transportation (+43 bps), Retail (+20 bps), and Agriculture (+16 bps).

Small business default trends remain benign and the rate of increase has been moderating. The PayNet Small Business Default Index (SBDFI) registered 1.9% in March 2017 compared to 1.6% in March 2016.  The highest default rates exist in Mining (4.6%), Transportation (4.5%), and Information (2.7%).

“As time goes on and uncertainties become a bigger issue, small private companies become more confirmed in their need for details,” Phelan added. “The healthcare sector has nearly thrown in the towel on further investment.”

Comments From Our Members

You must be an Equipment Finance Advisor member to post comments. Login or Join Now.