Published April 2013
Fewer small businesses failed in February 2013, helping boost D&B’s Small Business Health Index to pre-recession levels for the first time in five years. Reinvigorated construction, transportation, and business services sectors also fueled the improvement. Construction spending grew 2.1 percent during the first two months of 2013, compared to the same period in 2012. Overall, the main index increased 2.77 points to reach 100.9, the highest value since early 2007. Nevertheless, some sectors continued to struggle in February, including automotive and manufacturing.
Declining failures and delinquencies bode well for small businesses as the second quarter gets underway, as evidenced by similar improvements in the Consumer Confidence Index and Manufacturers’ New Orders. Nonetheless, the US economy remains very much in recovery mode as many sectors struggle with subpar performance. True economic recovery may require a few more quarters.
D&B’s monthly Small Business Health Index (SBHI) measures small business health through payment patterns, failure rates, and credit utilization. The SBHI follows a sampling of all active small businesses with fewer than 100 employees and combines pro- and counter-cyclical elements to provide a simple, representative number. Using 2004 as the base year (Index value 100), improvement is designated by an Index value above 100.