After 26 months of decline, American manufacturing is making a comeback—led by the smallest players in the game. Small businesses are redefining an entire sector.
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Green Shoots of Growth Seen in America’s Small Manufacturers
The U.S. manufacturing sector has been in a period of contraction for more than two years, but recent data suggests that a turning point may be on the horizon. The Purchasing Managers’ Index (PMI) reached 50.9 in January, breaking past the critical 50-point threshold for the first time in 26 months. This indicates that manufacturing activity is shifting from contraction to expansion, a positive sign for small businesses that have been a major driver of growth in the sector.
Over the past five years, the number of manufacturing businesses in the U.S. has grown by 13 percent, with small businesses leading the charge. Many of these businesses operate with fewer than nine employees and generate under $1 million in revenue, yet they now account for over 70 percent of commercial credit activity in the manufacturing sector.
This shift represents a significant change in an industry historically dominated by large, long-established firms. Small manufacturers are proving to be agile, innovative, and capable of carving out new opportunities in a challenging economic landscape.
Access to Credit is Key to Growth
One of the most striking trends in the sector is the increasing reliance on commercial credit cards. Since 2010, commercial card usage in manufacturing has surged by 37 percent. This suggests that small manufacturers are turning to flexible credit solutions to manage cash flow, finance equipment, and fund operational expenses.
Unlike traditional bank loans, commercial credit cards offer businesses quick access to funding with fewer restrictions, making them an attractive option for small manufacturers looking to scale operations. The consistent availability of credit will be a crucial factor in determining whether these businesses can sustain growth in the coming months.
What’s Driving the Manufacturing Sector’s Rebound?
Several factors contribute to the potential comeback of U.S. manufacturing, including:
Stabilizing Consumer Demand – Although consumer confidence declined in February, retail sales have remained steady. With personal income rising, consumer spending could provide support for increased manufacturing output.
Easing Cost Pressures – Rent inflation has slowed, and mortgage rates have dipped slightly, helping to stabilize business costs.
Access to Credit Improving – With consumer delinquency rates stabilizing, lenders may loosen credit restrictions, giving small manufacturers greater access to working capital.
Challenges Still Remain
While the manufacturing sector is showing signs of a potential recovery, small businesses still face significant challenges.
Economic Uncertainty – Inflation remains a concern, rising to 3.0 percent in January, marking the fourth consecutive month of increases.
Labor Market Pressures – The unemployment rate remains low at 4.1 percent, meaning small manufacturers may struggle to hire skilled workers.
Rising Interest Rates – While credit availability is improving, higher borrowing costs could limit expansion for some businesses.
Despite these hurdles, the resilience and adaptability of small manufacturers provide a strong foundation for future growth.
What This Means for Small Business Owners
For small manufacturers looking to capitalize on this potential expansion, there are a few key takeaways:
Monitor Credit Options – As banks and lenders adjust lending policies, it’s essential to stay informed about financing opportunities that can support business growth.
Invest in Efficiency – With cost pressures stabilizing, now is the time to invest in automation, technology, and process improvements that can boost productivity.
Stay Agile – The manufacturing sector is cyclical, and market conditions can shift quickly. Flexibility and adaptability will be critical in the months ahead.
The U.S. manufacturing sector is at a crossroads. While uncertainty remains, the recent uptick in PMI, business credit activity, and commercial lending trends suggests that a shift toward expansion is underway. At Experian, we will continue to track these developments and provide insights to help small business owners make informed financial decisions.
To stay ahead of the latest trends: ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis. ✔ Subscribe to our YouTube channel for regular updates on small business trends. ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow.
Want to learn more? Download the full Commercial Pulse Report for March 11, 2025.
Rising costs are continuing to squeeze American wallets — and perhaps nowhere is that more apparent than in the food sector. According to the latest Experian Commercial Pulse Report (October 14, 2025), food prices are having a profound impact on where and how consumers choose to eat. With the Consumer Price Index for food rising 3.2% year-over-year, both full-service and limited-service restaurants are feeling the heat.
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Specifically, Full-Service Restaurant prices have surged 4.6%, while Limited-Service locations have seen more modest increases of 3.2%, the lowest pace in over a year. As price-sensitive consumers pull back on discretionary spending, Experian’s data shows a notable shift toward more affordable dining options—or a return to eating at home.
Credit Demand Is Strong, But Approval May Be Slipping
Even with shifting consumer habits, restaurants are not sitting idle. Experian’s credit data reveals that both Full-Service and Limited-Service Restaurants are actively seeking commercial credit — a likely sign of increased working capital needs in the face of inflation and tighter margins.
However, access to that credit appears to be narrowing.
Commercial inquiries from Full-Service Restaurants have risen to 1.7x pre-pandemic levels.
Limited-Service Restaurants follow closely at 1.5x.
Yet the number of credit-active Limited-Service establishments has declined, suggesting either a slowdown in approvals or reduced eligibility.
This contrast implies that demand for financing is rising faster than approval rates, especially for smaller or newer businesses trying to stay competitive amid rising costs.
Shrinking Credit Limits, Rising Utilization
Restaurants are not only facing tighter access but also leaner terms. Average credit limits for new commercial card accounts have fallen significantly since 2021:
Full-Service Restaurants: Down from $11,500 to under $6,000
Limited-Service Restaurants: Also trending downward
Groceries (used as a benchmark for at-home eating): Down from $13,000 to $9,000
At the same time, credit utilization rates are climbing — an early warning sign that businesses are relying more heavily on revolving credit to manage day-to-day operations.
Full-Service Restaurants now use 31.9% of available credit, up 4.6 points since 2023.
Limited-Service Restaurants trail close behind at 31.8%.
Groceries come in at 28.8%, showing increased pressure even in the at-home dining sector.
Taken together, this combination of lower credit limits and higher utilization points to a tightening credit environment, which may be challenging for restaurants to navigate through the holiday and post-holiday seasons.
Commercial Risk Trends Tell a Mixed Story
One of the more nuanced insights in Experian’s report is how different restaurant types are weathering the current environment from a risk perspective:
Full-Service Restaurants show only a modest decline in commercial risk scores (–0.8 points), suggesting relative resilience despite financial pressures.
Limited-Service Restaurants, interestingly, saw a +1.4 point improvement in risk scores—indicating increased stability and better adaptation to current market conditions.
In contrast, grocery retailers—the benchmark for “eat-at-home” sectors—experienced a -1.8 point drop in their risk scores, highlighting greater strain in that segment.
This divergence reflects a growing consumer shift toward lower-cost food options like quick-service dining, potentially at the expense of both full-service restaurants and grocers.
What It Means for Lenders and Business Strategy
These trends carry significant implications for financial institutions, credit providers, and small business advisors:
Rising inquiries + shrinking credit limits = greater risk of liquidity stress
Stronger risk scores for Limited-Service = opportunity for more targeted lending or product offerings
Elevated utilization rates = need to monitor credit performance closely, especially for revolving credit
For business owners and operators, understanding these dynamics is crucial to building resilience in a volatile market. Strategic decisions around financing, menu pricing, staffing, and technology adoption will likely make or break performance through the next few quarters.
Conclusion: A Sector Under Pressure — but not out
While economic headwinds persist, the restaurant industry shows remarkable adaptability. Whether it’s shifting toward leaner operations, targeting lower-income consumers, or increasing credit usage to bridge cash flow gaps, the sector is evolving in real-time.
As always, Experian’s insights provide a critical lens into these movements—helping lenders, business leaders, and policymakers make smarter decisions amid uncertainty.
For the full analysis, including all small business credit trends, read the latest Experian Commercial Pulse Report.
✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis.
✔ Subscribe to our YouTube channel for regular updates on small business trends.
✔ Connect with your Experian account team to explore how data-driven insights can help your business grow.
Download the Commercial Pulse Report
Visit Commercial Insights Hub
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