WASHINGTON U.S. small businesses borrowing hit a five month low in February, in the latest indication of slower economic growth in the first quarter after an unusually harsh winter.
The Thomson Reuters/PayNet Small Business Lending Index, which measures the volume of financing to small companies, fell to 110.5 in February from a reading of 116.5 in January, PayNet said on Tuesday. That was the lowest level since last September.
The index continues to retreat from a near seven-year high touched in December. Still, it was 5 percent higher than it was in February 2013, an indication of underlying strength.
"Small business investment expansion signals moderate GDP growth," said PayNet founder Bill Phelan.
Unseasonably cold weather weighed on economic activity at the end of 2013 and the beginning of this year, setting the tone for a weak first quarter.
Growth in the first three months of this year is expected to have slowed to an annualized pace below 2 percent after expanding at a 2.6 percent rate in the fourth quarter.
Activity, however, is showing signs of accelerating as temperatures warm up, with employment growth, industrial production and retail sales gaining momentum in February.
A separate index released by PayNet showed loan delinquencies steady. Delinquencies of 31-to-180 days were little changed in February at 1.48 percent of all loans made.
The index hit a high of 4.73 percent in August 2009. The record low was 1.44 percent last October.
PayNet collects real-time loan information such as originations and delinquencies from more than 250 leading U.S. lenders.
(Reporting By Lucia Mutikani; editing by Andrew Hay)