Commercial Pulse Report

Commercial Pulse Report | 6/3/2025 The latest Experian Commercial Pulse Report provides a sharp look at how recent economic shifts are impacting small businesses across the U.S., with a special focus on supply chains, specifically the transportation industry, which is experiencing fallout from changing trade policies. Are industry-specific models effective in mitigating risk? Inflation, Employment, and Consumer Outlook April inflation cooled slightly to 2.3%, marking the lowest increase since February 2021. While this might suggest some price relief, the overall sentiment in the market tells a more cautious story. Unemployment held steady at 4.2%, and wages continued to climb, signaling that the labor market remains resilient. However, optimism is waning. The NFIB Small Business Optimism Index dropped to 95.8, its lowest point since October 2024. Meanwhile, consumer sentiment fell to 50.8 in early May, reflecting growing concern over the economic outlook. Together, these indicators suggest that although the job market remains stable, confidence — both among businesses and consumers — is eroding. A Dip in the Small Business Index April saw a drop in Experian’s Small Business Index, falling from 47.2 to 43.2, with a year-over-year decline of 11.9 points. This marks the first decline in four months and highlights the early impact of broad tariffs announced on April 2nd. While the dip was modest, it reflects growing pressure on small businesses as they navigate cost increases, supply chain uncertainty, and changing consumer behavior. Encouragingly, despite the turbulence, several economic indicators remained steady. Mortgage rates held below 7% for the 17th straight week, and business formation remained strong with over 449,000 new businesses launched in April. Transportation Industry: First to Feel the Hit This month’s report shines a spotlight on the transportation sector, which has been uniquely sensitive to recent tariff activity. As a major driver of the U.S. economy — contributing 3.3% to GDP and employing over 4% of the workforce — transportation is often the first industry to feel the ripple effects of economic change. And the response was swift. After trade tariffs were announced in early April, shipping volumes from China to the U.S. dropped by more than 60% year-over-year. Just weeks later, following a temporary 90-day lift on tariffs, volumes rebounded sharply, jumping over 28%. This volatility underscores the sector’s dependence on global trade — and the speed at which policy shifts can influence business activity. Rising Risk — and Smarter Tools Financial stress in the transportation industry is rising. Businesses are carrying higher credit balances, delinquencies are increasing, and commercial credit scores have fallen from 44 to 36 since 2015. These trends point to a sector that’s struggling to adapt amid changing economic conditions. To help lenders better manage risk, Experian developed a transportation-specific credit model that significantly outperforms generic scoring models. By focusing on variables like credit utilization and payment history — which are particularly telling in this industry — the model offers a more accurate picture of which accounts using transportation financing are most likely to default. In today’s uncertain environment, such targeted tools are crucial for staying ahead of risk. Generic models aren't enough For credit professionals and risk leaders, the message is clear: in times of volatility, generic models aren’t enough. Tailored strategies — like Experian’s transportation-specific scoring model — provide the clarity needed to make smarter, faster decisions. Read this week's report for more details. Stay Ahead with Experian ✔ 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

Discover highlights from Experian’s March 2025 Commercial Pulse Report: GDP dip, small business growth, and rising income inequality.

April 2025 Pulse Report reveals trade disruption uncertainty, small business sentiment shifts, and a surge in manufacturing entrepreneurship.

Despite concerns about a slowing job market, job satisfaction among American workers remains high.

This week we focus on 2025 small business financial fraud, why it has increased, key stats, and strategies to protect your business.

Experian reports the manufacturing sector may be on the verge of a shift after more than two years of contraction | Commercial Pulse Report

The Commercial Pulse Report | 2/25/2025 The latest Experian Commercial Pulse Report provides a snapshot of the evolving U.S. economic landscape, highlighting key macroeconomic trends and the growing impact of minority-owned businesses. As inflation persists and credit markets tighten, small businesses are navigating a complex financial environment. However, within this challenge lies a significant opportunity—supporting minority-owned businesses, a rapidly expanding sector generating over $2 trillion in annual revenue. Watch Our Commercial Pulse Update Macroeconomic Highlights: Inflation, Employment, and Consumer Trends Inflation and Interest Rates - Inflation remains a key concern for small businesses, rising to 3.0% in January, marking the fourth consecutive monthly increase and the highest level since June 2024​. Core inflation, which excludes food and energy, also increased to 3.3%, signaling persistent pricing pressures across industries. Rent inflation showed some relief, dropping to 4.4%, but food inflation remained high at 2.5%, while energy inflation increased for the first time in six months​. Employment and Wages - The U.S. labor market is showing mixed signals. The unemployment rate stands at 4.0%, slightly down from December, yet job creation has slowed dramatically. Only 143,000 jobs were added in January, a significant drop from 307,000 in December, marking the weakest growth in three months​. At the same time, wages have risen to $30.84 per hour, which may contribute to inflationary pressures for businesses​. Consumer Spending and Retail Sales -Retail activity has softened, with January retail sales declining 0.9% month-over-month, the largest drop since March 2023. However, year-over-year sales remain up 4.2%, indicating that while consumers are spending more cautiously, demand is still present​. Small Business Sentiment and Credit Markets - The NFIB Small Business Optimism Index declined to 102.8 in January from 105.1 in December, reflecting growing concerns among business owners​. The uncertainty index surged 14 points to 100, the third-highest level on record, suggesting businesses are wary about future economic conditions. Credit access remains a major concern, reflected in the Experian Small Business Index, which dropped to 40.5, down from 42.9 last month and 11 points lower year-over-year​. This decline underscores the increasing difficulty small businesses face in securing credit to fund growth and operations. The Opportunity: Minority-Owned Businesses Are Thriving but Need More Support One of the most compelling insights from this month’s Commercial Pulse Report is the remarkable growth of minority-owned small businesses. These enterprises are expanding at a much faster rate than non-minority-owned businesses and now represent a significant share of new commercial account originations. Key Growth Trends Over 8 million minority-owned businesses contribute more than $2 trillion in annual receipts, representing a powerful economic force​. Between 2014 and 2019, the number of minority-owned businesses increased by 35%, compared to just 4.5% growth among non-minority businesses​. Minority-owned businesses make up 41% of new commercial accounts, up from 37% in 2021, underscoring their increasing role in the broader business ecosystem​. Funding Gaps and Credit Access Challenges Despite this rapid growth, minority-owned businesses continue to face challenges in accessing credit: On average, they receive 7% - 37% less funding across most commercial lending products​. Businesses under six years old account for 44% of new commercial accounts for minority-owned firms, compared to just 31% for non-minority firms, yet they struggle to secure the funding they need to scale​. This funding gap is not due to higher credit risk—minority-owned businesses exhibit comparable commercial credit performance to their non-minority counterparts​. Industries Driving Minority Business Growth Minority-owned businesses are expanding into high-growth sectors such as: 🏗 Construction🛍 Retail🍽 Accommodation & Food Services💡 Technology & Healthcare These industries require significant upfront capital for expansion, making access to credit crucial for long-term success​. What This Means for Lenders and Policymakers The disconnect between strong minority business growth and limited access to funding presents a major opportunity for lenders. For Lenders: Expanding lending opportunities for minority-owned businesses represents a high-growth market with proven credit performance. Bridging this funding gap can unlock billions in economic activity while serving an underserved business community. For Policymakers: Addressing structural barriers to credit access can further accelerate job creation, economic expansion, and financial inclusion in communities nationwide. Final Thoughts: Investing in the Future of Small Business The U.S. small business landscape is evolving. While macroeconomic headwinds—such as rising inflation and uncertain credit markets—present challenges, minority-owned businesses are demonstrating resilience, expansion, and growing demand for capital. For lenders, this is a $2 trillion opportunity to support a fast-growing sector with proven potential and unmet capital needs. By addressing credit access barriers, financial institutions can drive both economic growth and financial inclusion in the years ahead. Download the Commercial Pulse Report Visit Experian Small Business Index

Commercial Pulse Report insights, including small business optimism vs consumer confidence, and the Experian Small Business Index.

The January 28, 2025, Commercial Pulse Report reveals fascinating insights into the evolving U.S. economy, with a spotlight on the transportation and warehousing sector—a critical backbone of global trade and supply chains. Watch Our Commercial Pulse Update Over the past year, this industry has experienced steady growth, largely fueled by younger businesses. Companies less than two years old now account for a remarkable 50% of new commercial credit accounts in the sector. This entrepreneurial surge reflects the industry's role as a magnet for new opportunities amid expanding global trade. Rising Credit Risks Amid Growth While the sector’s growth is a promising trend, it has come with challenges. Credit risk for transportation and warehousing businesses peaked in 2023, prompting lenders to tighten underwriting standards. This shift has led to a noticeable reduction in the total volume of commercial credit granted within the sector, making it harder for businesses to access the funding they need. Source: Experian Commercial Pulse Report Global Trade and Its Influence The broader trade environment has also played a role in shaping this industry. Global trade expanded by 3.3% in 2024, with services trade leading the way at a 7% increase. However, the U.S. trade deficit widened to $78.2 billion in November, driven by rising imports and geopolitical uncertainties. Tariff adjustments under President Trump’s administration could further impact this industry, introducing a layer of unpredictability for 2025. Looking Ahead The transportation and warehousing sector stands at a crossroads, balancing opportunities for growth with mounting credit constraints and external pressures from the global trade landscape. Businesses operating in this space will need to stay agile, exploring innovative strategies to navigate financial challenges and capitalize on expanding trade networks. For more insights into how these trends are shaping the small business economy download the Commercial Pulse Report, visit Experian’s Commercial Insights Hub or reach out to your Experian account team to explore customized solutions for your business. Download Commercial Pulse Visit Commercial Insights Hub