Read our full analysis for a more in-depth look at these trends.
Small Business Checkpoint: Still in the black
Small business profitability remains in good shape, though they cut back on discretionary spending and tapered payrolls in March.
April 2025
Key takeaways
- Small business optimism and real sales expectations have fallen, reversing gains from late 2024, according to the National Federation of Independent Business (NFIB). But both measures remain above levels seen during the past two years, and small business profitability is up in March, a continuation of increases seen since January.
- Although small business profit margins are holding up, there are signs of slowing spending on discretionary business items like advertising. In March, the number of transactions towards business services and advertising was down -1.3% compared to the start of the year, according to Bank of America data. The decline may be, in part, due to increased spending on inventory financing.
- This spending has helped boost hiring in the transportation sector. Payroll per small business client in that sector was up 15.6% year-over-year (YoY) in March, according to Bank of America data. More broadly, total payrolls grew 2.6% YoY in the first quarter, though this is down from levels seen in the last two quarters of 2024.
Small Business Checkpoint is a regular publication from Bank of America Institute. It aims to provide a real-time assessment of small business spending activities and financial well-being, leveraging the depth and breadth of Bank of America’s proprietary data. Such data is not intended to be reflective or indicative of, and should not be relied upon as, the results of operations, financial condition or performance of Bank of America.
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