The document introduces D&B's new Economic Health Tracker, which uses multiple indicators to assess the economic health of small businesses and the overall US economy. It finds that while the Small Business Health Index declined slightly recently, many factors like credit availability and lagging industry growth are improving. The overall US Business Health Index is at its highest level since 2010 and improved substantially in the last year. The document concludes that signs point to continued economic growth above 2.5% and further job gains in 2014 based on ongoing risk and balance sheet improvements among US businesses.

1. Introducing A New Way To Assess
U.S. Economic Activity
Paul Ballew, Chief Data & Analytic Officer, D&B
February 6, 2014
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2. Introducing D&B’s Economic Health Tracker
A multi-dimensional view of the economy

3. Small Business Health Index
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4. The Small Business Health has been remarkably stable
for the first time post recession
Some signs of modest softening but the US is still positioned to grow above 2%
105
Overall Small Business Health Index: Past 3 years
100
10.0%
Overall Small Business Health Index: YOY Changes
8.0%
95
90
85
6.0%
4.0%
80
75
70
2.0%
0.0%
2011
2012
2013
-2.0%
Source: D&B Proprietary Data
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5. The recovery process for small businesses
remains uneven
Industries which seemed to be lagging behind in the recovery process are
gradually accelerating
25.0%
Small Business Health Index by Vertical: YOY Changes
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
Manufacturing
Transportation
2011
2012
Personal Services
2013
Source: D&B Proprietary Data
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6. …. And a few sectors that bounced back quickly have
leveled off
On the other hand, industries which were initially leading the recovery
have slowed down in the past year
20.0%
Small Business Health Index by Vertical: YOY Changes
15.0%
10.0%
5.0%
0.0%
-5.0%
Retail
Real Estate
2011
Business Services
2012
Construction
2013
Source: D&B Proprietary Data
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7. Credit growth has accelerated for small
businesses
Post recession, the small businesses have experienced more credit growth
through the more conventional avenues, although credit card loans have also
been on the upturn in the past two years
$19,200
$18,800
Credit Card Current Balances ($M)
$75,000
$1,600
Loans Current Balances
$70,000
$1,500
$65,000
$18,400
$1,400
$60,000
$1,300
$55,000
$18,000
$1,200
$50,000
$45,000
$1,100
$40,000
$17,600
$1,000
$17,200
Commercial & Industrial Loans, All Commercial Banks ($Bn, left)
Small Business Loans, D&B Database ($Mn, right)
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8. Overall credit usage and availability has
improved
Although still falling short of pre-recession levels, access to credit for US
businesses is on an upturn
Card Utilization Index
40.00%
30.00%
Y/Y Percentage Chg.
20.00%
10.00%
0.00%
-10.00%
-20.00%
-30.00%
Q4 2005
Q1 2006
Q2 2006
Q3 2006
Q4 2006
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q3 2008
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
-40.00%
Source: D&B Proprietary Data
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9. U.S. Jobs Health
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10. U.S. Business Health Index
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11. U.S. Business Health Index
•
•
The overall US business health index improved in January for the fourth-consecutive month—
reaching 52.8%.
This was the highest level recorded since the inception of the index in December 2010.
Overall
56
54
52
50
48
46
44
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12. U.S. Business Health Index
•
•
On a year-over-year basis the overall index increased 5.9 percentage points (pp.)—the
strongest growth since June 2012.
Viability (+14.8 pp.), Total Loss Predictor (+2.2 pp.) and the Delinquency (+0.9 pp.) components
all increased on a 12-month basis.
Overall
Viab
Delinq
TLP
20.0%
Strong growth in Viability
helped to lift the overall
indicator
Y/Y Percent Chg.
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
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13. Summary
• The Small Business Health Index declined modestly in the current month and warrants tracking going
forward. A number of factors including the weather may be influencing so D&B remains confident in
our economic outlook
• The recovery for small business remains uneven although there are signs that some lagging sectors
are gaining momentum. One important driver of growth is credit availability and usage and there are
improving signs on this front
• Based on the Small Business Health Index, D&B expects economic growth in excess of 2.5% and
improvement in nonfarm payroll employment
• As 2014 begins, composite risk and balance sheets among U.S. businesses continue to improve. The
overall index was once again above the “no change” threshold continuing its trend higher. January’s
reading bodes well for the future of U.S. businesses health.
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