Insights from Experian’s September 16, 2025 Commercial Pulse Report
This week’s Experian Commercial Pulse Report shines a spotlight on one of the most critical yet vulnerable sectors in the U.S. economy: construction. The industry has experienced significant growth over the last seven years, but fresh data reveals mounting signs of financial stress that commercial lenders and Chief Risk Officers should be closely monitoring.
Watch the Commercial Pulse Update
Construction Growth Reaches New Heights
Since 2018, Construction GDP has increased by 53%, reaching $1.34 trillion in Q1 2025. The sector now makes up 4.48% of total U.S. GDP, just below its pandemic-era peak in mid-2020.
At the same time, construction employment has rebounded strongly, with more than 8.3 million Americans now working in the sector — a 9% increase over pre-pandemic levels. On the surface, construction appears to be thriving.
But a closer look reveals signs of market cooling:
- Building permits have declined, suggesting future construction volume may slow.
- Housing inventory has returned to pre-pandemic levels, leading to rising vacancy rates.
- Material costs — especially for insulation and drywall — remain stubbornly high, placing added pressure on operating margins.
These trends reflect a shift in the construction cycle — from expansion to potential contraction — and the financial effects are already showing up in commercial credit behavior.
Credit Stress Is Building
Experian’s data highlights a credit environment that is tightening for construction businesses:
- The number of active commercial accounts has plateaued, signaling reduced borrowing activity.
- Credit inquiries have been rising since late 2021, showing that more businesses are seeking financing — but lenders appear increasingly cautious.
- The number of new open trades has declined, indicating less credit is being extended even as demand grows.
Most notably, delinquency rates are climbing.
As shown in the chart above, the 90+ day delinquency rate rose sharply in 2022 and, after a brief cooling period, resumed an upward trend in 2024. As of May 2025, the rate has reached 0.07%, its highest point in several years.
This aligns with a broader concern: construction businesses are facing more financial pressure, even as headline indicators remain strong.
What This Means for Risk Leaders
For CROs, credit strategists, and commercial underwriters, these trends serve as early warning signals.
- Delinquency rates and inquiry volume should be integrated into portfolio monitoring systems as forward-looking indicators.
- Underwriting score thresholds may need adjustment for construction-related businesses, especially those showing increased credit-seeking behavior without corresponding trade activity.
- The broader credit environment is tightening, and construction — historically a cyclical industry — is often among the first to feel the impact of shifting economic conditions.
By monitoring these sector-specific metrics in real time, lenders can get ahead of emerging risks before they spread to adjacent sectors like real estate, materials, and heavy equipment.
Construction is still contributing significantly to economic growth — but that growth is coming under strain. Rising costs, declining credit access, and increasing delinquencies are creating a complex risk profile that demands close attention.
For the full analysis, including all small business credit trends, read the latest Experian Commercial Pulse Report.
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- ✔ 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.
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As temperatures rise across the U.S., so does the nation’s appetite for travel—and the Leisure & Hospitality sector is feeling the heat. In this week's Commercial Pulse Report, we examine how soaring consumer demand intersects with evolving credit conditions for businesses in travel, lodging, and transportation. Travel Rebounds, But the Story Is Mixed By every measure, Americans are traveling in droves. AAA projected over 72 million domestic travelers over the July 4th holiday—setting a record. Meanwhile, Memorial Day travel surged across all transportation types, especially road trips, which saw a 3.0% year-over-year increase. However, despite six new TSA checkpoint records in June, major airlines have cut forward-looking forecasts, signaling a notable shift: travelers are increasingly opting for alternatives like road and rail over the skies. This change in travel behavior has direct implications for how different business subsectors access and manage credit. Infrastructure Drives Commercial Credit Trends The Leisure & Hospitality industry is broad and fragmented—from mega-airlines and hotel chains to small sightseeing operators and independent RV campgrounds. This diversity is reflected in commercial credit data. Businesses with heavy infrastructure needs—like airlines and hotels—tend to carry higher loan and credit line balances. Airlines, in particular, average the highest number of commercial trades, a reflection of their large-scale operations and capital intensity. Hotels also hold sizeable credit, but with a twist. While revenues have rebounded beyond pre-pandemic levels, occupancy rates remain flat due to an increase in room supply from new construction. The hotel pipeline stood at 6,211 projects with over 722,000 rooms as of Q3 2024, signaling sustained investment even amid margin pressures. Rental Cars: High Volume, Higher Risk The rental car sector stands out—but not in a good way. Despite being a key enabler of domestic travel, these businesses exhibit the highest commercial credit risk across the industry. According to Experian’s Commercial Risk Classification, 32% of rental car companies are considered Medium-High to High Risk, compared to less than 10% in categories like air transport and sightseeing. The elevated risk may be due to a combination of factors: fleet acquisition costs, multi-location exposure, and operational disruptions during the pandemic. While credit trades in this segment remain high, inquiries have declined over recent years, possibly reflecting tightening lending standards or constrained demand for new credit. Encouraging Risk Trends—With Exceptions Across the broader Leisure & Hospitality industry, there’s been a decline in commercial credit risk since 2020. The share of businesses classified as Medium-High or High Risk dropped from 11.7% to 8.5% as of April 2025. Most firms now fall into the Medium Risk category—a sign of normalization in the sector. Delinquency rates remain low (under 1%), and the average Intelliscore Plus v2 score has remained stable across most subsectors. Still, credit conditions vary sharply by business type, underlining the importance of nuanced risk assessment in portfolio management. Smarter Credit Allocation Starts with Subsector-Level Insight The summer travel surge is a powerful reminder of the sector’s resilience—but not all players are experiencing the boom equally. For credit professionals and commercial lenders, the latest data from Experian suggests a growing divide: infrastructure-heavy firms are leaning into credit, while high-risk subsectors like rental cars may warrant closer scrutiny. Whether your clients are in air transport or roadside accommodations, understanding these credit trends will be key to navigating the second half of 2025. ✔ 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 Related Posts
