D&B’s Chief Economist Paul Ballew highlights the key findings on U.S. businesses for April 2014, in the May edition of U.S. Economic Health Tracker. The Tracker examines three macro indicator dimensions: the Small Business Health Index (SBHI), U.S. Jobs Health and U.S. Business Health Index .

1. Paul Ballew, Chief Data & Analytic Officer, D&B
Tuesday, April 29, 2014 – 8:30AM
Economic Briefing
Follow us on Twitter @DnBEconomy
#DnBEconBrief

2. Executive summary
• D&B’s proprietary measures on business activity continue to send conflicting
messages about the US economy
• The Small Business Health Index stabilized in the most recent monthly reading
but a stronger recovery was expected with the improvement in weather across
the country
• On the employment front D&B continues to assess a gradual improvement with
payrolls projected to grow in excess of 200,000 this month
• D&B’s Economic Health Tracker continues to flash positive signals regarding the
financial health of the private sector across most verticals and geographies
2#DnBEconBrief

3. Small Business Health Index
• The Small Business Health Index stabilized in the current month following
a number of months of erosion
• The indices for major industries show no significant movements
• There are areas of improvement, like improved payment performance,
but overall most activity stabilized in the current month
3#DnBEconBrief

4. SBHI: Revisiting the past year by industry…
• The performance of the major industries have been tepid starting in the final quarter
of 2013
• Some weather-sensitive sectors like Construction and Real Estate remain historically
below average, but all sectors seem to similarly affected by the recent bout of harsh
weather
4
70.0
80.0
90.0
100.0
110.0
120.0 Small Business Health Index by Sector: The past year
Overall Retail Construction Business Services Real Estate

5. ...and geography
• While most top-performing MSAs show modest improvements in the past
year, the performance of the slowest ones have plunged
5
80.0
100.0
120.0
140.0
160.0
180.0
200.0
Q1 2013 Q2 2013 Q3 2013 Q4 2013
Small Business Health Index: Top performing MSAs
Miami, FL Atlanta, GA
Nshvlle-Dvdson, TN San Antonio, TX
60.0
70.0
80.0
90.0
100.0
110.0
Q1 2013 Q2 2013 Q3 2013 Q4 2013
Small Business Health Index: Slowest Performing MSAs
Chicago, IL Phoenix, AZ
Salt Lk City-Ogden, UT Richmond, VA

6. On the brighter side, the recent erosion in
payment performances seems to be stabilizing
• The increase in dollar delinquencies that have caused some concern during
the recent months have fallen back to their pre-winter levels this month
6
2.5%
2.7%
2.9%
3.1%
3.3%
3.5%
3.7%
3.9% Small Business Dollar Delinquencies
Percent Dollars 91+ Days Past Due
Source: D&B Proprietary Data

7. Availability of credit to small businesses is
improving…
• Small Businesses are resorting to more conventional avenues of credit and
decreasing credit card usage
Source: Job Openings and Labor Turnover Survey, (BLS), Haver Analytics and D&B Proprietary Data
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Trend: Number of Loan Accounts
Private Sector Job Openings, thousands (Left)
D&B Proprietary Number of Loan Accounts, thousands (2 quarters prior, Right)
$17,400
$17,600
$17,800
$18,000
$18,200
$18,400
$18,600
$18,800
$19,000
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000 Trend: Credit Card Current Balances
S&P US Private Label Credit Cards, Outstanding Balance, $M (Left)
D&B Proprietary Credit Card Current Balances, $M (4 quarters prior, Right)

8. The Small Business Administration reports increases
in amounts of loan approval and a reduction in
charge off amounts for U.S. small businesses
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$0
$5,000,000,000
$10,000,000,000
$15,000,000,000
$20,000,000,000
$25,000,000,000
$30,000,000,000
$35,000,000,000
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
SmallBusinessLoanApprovalAmount($)
Source: The U.S. Small Business Administration
7(A) regular Total --All types of loans
$0
$500,000,000
$1,000,000,000
$1,500,000,000
$2,000,000,000
$2,500,000,000
$3,000,000,000
FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
SmallBusinessChargeOffAmounts($)
Source: The U.S. Small Business Administration
7(A) regular Total --All types of loans

9. … and charge-off rates have plunged
9
0.0%
0.4%
0.8%
1.2%
1.6%
2.0%
0.0%
1.0%
2.0%
3.0% Charge-off rate on Business Loans
All Business Loans, Federal Reserve Board
Small Business Loans, D&B database
0.00%
0.40%
0.80%
1.20%
1.60% Charge-off Rate on Credit Card Loans
• Charge-off rates on all small business loans have declined significantly
in the past few years

10. U.S. Jobs Health
10#DnBEconBrief
• D&B expects 208,000 jobs to be added to Nonfarm Payroll
• Manufacturing and Business Services feature the major gains
• Retail begins to strengthen while Real Estate features losses this month

11. Nonfarm Payroll Employment saw severe
declines during the last recession…
11#DnBEconBrief
-8,000
-7,000
-6,000
-5,000
-4,000
-3,000
-2,000
-1,000
0
Totalnonfarmemployees,ThousandsSA
Source: Bureau of Labor Statistics
Nov 1948-Oct 1949 Jul 1953-May 1954 Aug 1957-Apr 1958 Apr 1960-Feb 1961
Dec 1969-Nov 1970 Nov 1973-Mar 1975 Jan 1980-Jul 1980 Jul 1981-Nov 1982
Jul 1990-Mar 1991 Mar 2001-Nov 2001 Dec 2007-Jun 2009
Over seven million jobs
were lost from the start of
the recession to the
end—more than the prior
four recessions combined

12. ... but a bounce back may be underway
12#DnBEconBrief
March 2014 marked a significant turning point in the labor market. All private
nonfarm jobs that were lost since the beginning of the financial crisis were gained
back
-10000
-9000
-8000
-7000
-6000
-5000
-4000
-3000
-2000
-1000
0
1000
Dec-2007
Feb-2008
Apr-2008
Jun-2008
Aug-2008
Oct-2008
Dec-2008
Feb-2009
Apr-2009
Jun-2009
Aug-2009
Oct-2009
Dec-2009
Feb-2010
Apr-2010
Jun-2010
Aug-2010
Oct-2010
Dec-2010
Feb-2011
Apr-2011
Jun-2011
Aug-2011
Oct-2011
Dec-2011
Feb-2012
Apr-2012
Jun-2012
Aug-2012
Oct-2012
Dec-2012
Feb-2013
Apr-2013
Jun-2013
Aug-2013
Oct-2013
Dec-2013
Feb-2014
Source: Bureau of Labor Statistics
Cumulative Change in Total Private Employment (SA, Thous)

13. U.S. Business Health Index
• The overall US Business Health Index continued its upward trend in April to reach
53.7%. The index recorded its seventh-consecutive sequential increase. Once again
reaching the highest level since the inception of the report in December 2010.
• Strong growth was recorded across the board while small businesses and separately
business services notably accelerated in April
13#DnBEconBrief

14. • On a year-over-year basis the overall index rose 8.6 percent, accelerating from the previous month
to reach its fastest pace since the report began in December 2010.
• The viability component continued to lift the overall index recording double digit year-over-year
growth. In addition to viability the total loss predictor surged in April—signaling extreme risk has
improved markedly from a year ago.
U.S. Business Health Index
14#DnBEconBrief
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14
Y/YPercentageChg.
Note: Delinquency rates and the Total Loss Predictor are inverted to capture the effects that lower rates will raise the overall score.
Overall Viability Delinquency Total Loss Predictor

15. What’s happening among small businesses?
15#DnBEconBrief
• Small businesses’ balance sheets are stronger then compared to the past five years,
they are improving at an increasing pace and “catching up” to their larger counterparts.
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
38
40
42
44
46
48
50
52
54
Y/YPercentageChg.
(Small Class) Employment < 100 (Primary axis) (Small Class) Employment < 100 (Secondary axis)
0
Difference (Overall Business Health Index--Large Companies Minus Small)

16. Summary
16#DnBEconBrief
• The Small Business Health Index stabilized this month with its value standing at 91.5
points. A stronger bounce back was expected and D&B will continue to examine the
tepid improvement
• D&B expects some improvements in the Employment situation with some sectors like
Retail picking up pace again
• The Overall Business Health Index continued to gather strength in April. As the U.S.
economy continues to heal after the “great recession” business risk continues to move
further into a low risk environment.

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