After a busy holiday season, we are pleased to announce the publication of our Winter 2023 Beyond the Trends report.
Holiday spending increases by 7.6%
Small businesses’ health and performance in 2022 was strong as consumers spent beyond their means, to prolong demand behaviors learned in an economy overflowing with stimulus, coming out of the pandemic where personal savings was running lean.
Despite impact of inflation on incomes, spending continues
Retailers will fight for consumer spending, but consumers will find their purchasing power limited as interest rates increase and assumption of unexpected debt payments.
Consumer credit overall decreased 16% month over month in the fourth quarter as delinquencies climbed as mortgage markets continue to slow. New unsecured credit card debt rose 4% as thin consumer savings forced more debt to the consumers credit card.
New U.S. emerging businesses seeking credit is down 5.7% year over year as new business applications in the U.S. slow and commercial delinquencies rise.
Experian saw a 61% YOY increase in the percentage of high risk small business credit inquiries with emerging business seeking credit up 78.5% year over year with limited commercial credit history in the 4th quarter leading to lower-than-normal average credit lines across the industry.
Small business lenders will focus on four critical areas in the coming months to ensure their businesses remain stable and continue to grow.
- Market expansion
- Deterring fraud
- Limiting portfolio exposure
- Developing loyalty among profitable customers