(Reuters) - U.S. small business borrowing rose in June, data released on Thursday showed, but not enough to reverse three straight months of decline, pointing to sluggish economic growth ahead.
The Thomson Reuters/PayNet Small Business Lending Index rose to 138.9 in June, from May’s upwardly revised 131.1. It was down 5 percent from a year earlier, as borrowing by companies in all major industry groups sagged.
The PayNet index typically corresponds to U.S. gross domestic product growth one or two quarters ahead. The U.S. economy grew just 1.2 percent last quarter, a government report showed last week, after registering a meager 0.8 percent in the first quarter.
Small business borrowing is a key barometer of growth because small companies tend to do much of the hiring that drives economic gains. The figures released Thursday suggest “no big contribution to GDP from private companies,” said Bill Phelan, PayNet’s president.
Meanwhile, companies appeared to be having more difficulty paying back existing loans. Loans more than 30 days past due rose in June to 1.56 percent, the highest since October 2014, separate data from PayNet showed.
PayNet collects real-time loan information such as originations and delinquencies from more than 325 leading U.S. lenders.
Reporting by Ann Saphir; Editing by Andrew Hay and David Gregorio