US small businesses are worried about access to credit
This chart tracks a survey of sentiment from the National Federation of Independent Business (NFIB). After an unprecedented tightening cycle and last month’s sudden bank failures, US small businesses are concerned about a credit crunch.
The top panel charts small businesses’ near-term expectations about credit conditions, as measured by the NFIB. We’ve inverted the Y axis, so a higher reading represents greater negativity.
Pushing this survey data forward by a year shows its power as a leading indicator when compared with three decades of US bankruptcy filings. With small businesses expecting tighter credit, this correlation suggests business failures may pick up from the multi-decade low that has lingered post-pandemic.
The second panel indicates further cause for concern: the NFIB survey shows that respondents remain heavily pessimistic about the six-month outlook for business conditions.