Q2 2021 Main Street Report Highlights
Experian and Moody’s Analytics have just released the Q2 2021 Main Street Report. The report brings deep insight into the overall financial well-being of the small-business landscape and offers commentary on business credit trends and what they mean for lenders and small businesses.
Here are a few highlights:
- Price increases and supply chain issues persist
- The labor shortage is driving wage growth in some industries
- GDP grew at 6.5 percent
As some industries struggle to contain price increases and to survive in a post-pandemic world, others are thriving on the back of economic reopenings driving consumption. Reopenings and pent-up demand for services are pushing up economic growth and powering a robust economic recovery.
Moderately delinquent small business credit, defined as 31-90 days past due (DPD), moved down in the second quarter to 1.19 percent. But severe delinquency moved higher in the second quarter to 2.35 percent. After a long period of decline, this upward movement in severe delinquency rates is the largest in the post-recession period.
Rising costs is becoming a factor among small businesses as they service their credit obligations. In the most recent NFIB survey, 39 percent of respondents indicated they were raising wages. If we break this down, we can see that wages are rising at double-digit rates in industries, such as leisure and hospitality. And this could spell trouble on the horizon in some sectors, as employers fight to control expenses.
Real GDP grew at an annualized rate of 6.5 percent in the second quarter, led by consumption. The rapid rebound from Covid-driven shutdowns sustained the rapid economic growth of the second quarter as stimulus continued and vaccination rates increased.
Join us for a deep dive
If you would like to get the full analysis of the data behind the latest Main Street Report, watch our Quarterly Business Credit Review webinar. Just scan the code or go to the short link and remember to download your copy of the latest report.
