Better jobs market, surging consumer confidence could lead to a greater need for purchase order financing

The economy has shown a couple of signs of improvement in the past month, which may lead to a need for purchase order financing among manufacturers and wholesalers. 

The employment situation has been one of these positive indicators, and it continued to show signs of recovery in May as the private sector added 135,000 jobs, according to the ADP National Employment Report

All of the jobs came from the service providing sector, as the goods producing sector saw a drop of 3,000 positions. Based on company size, small businesses added 58,000 jobs, with medium and large businesses each creating 39,000 positions. 

Mark Zandi, chief economist at Moody's Analytics, said job growth had slowed since the beginning of the year, but it could be picking up momentum again as May added more jobs than April. 

"The job market continues to expand, but growth has slowed since the beginning of the year," Zandi said. "The slowdown is evident across all industries and all but the largest companies. Manufacturers are reducing payrolls. The softer job market this spring is largely due to significant fiscal drag from tax increases and government spending cuts."

Surging consumer sentiment also providing the economy with a boost
The employment situation isn't the only thing that has been leading to an improving economy, as surging consumer sentiment is another good sign. 

The Thomson Reuters/University of Michigan Index of Consumer Sentiment jumped from 76.4 in April to 84.5 in May. This was a 10.6 percent bump from the previous month and a 6.6 percent year-over-year increase. 

The two driving factors behind the marked rise in confidence were higher home and stock prices. 

Consumers are also feeling more confident in the future as well, as the Index of Consumer Expectations hit 75.8 in May, up from 67.8 in the previous month. 

"The surge in consumer confidence is exactly the type of economic jumpstart the Federal Reserve intended to result from its aggressive policies," said Surveys of Consumers chief economist Richard Curtin. 

It wasn't all good for consumers though, as Curtin said many are still expressing some concern over slow wage gains. However, as consumer spending picks up, he believes firms will increase their hiring, which should lead to better income gains. 

As the economy sees accelerated growth, small- to medium-sized manufacturers and wholesalers might need to increasingly turn to purchase order financing. 

An improving economy leads to the potential for additional business, and if any orders these companies receive are larger than those they typically handle, financial assistance may be needed. 

In order to take advantage of these great opportunities for growth, manufacturers and wholesalers can turn to purchase order financing, as this agreement allows them to obtain up to 100 percent of the funds needed to fill an order. 

One of the major benefits of this type of financing is that it allows a business to fill large order from big-box retailers, such as Target and Walmart, without having to sell any equity in the company.