Small Business Checkpoint

Small business payments grew in July led by construction spending as demand for building in the manufacturing sector ramps up.

Headshot of Anna Zhou

Anna Zhou

Headshot of Taylor Bowley

Taylor Bowley

August 2023

Key takeaways

  • Small businesses appeared to be more upbeat in July as the National Federation of Independent Business sentiment rose to an eight-month high. Higher sentiment also led to an improvement in small business spending. Total payments per small business client still fell in July but at a smaller degree of -1.6% year-over-year (YoY), based on Bank of America internal data, up from -3% YoY in June.
  • Payments are growing the fastest for small businesses in the construction sector, per Bank of America internal data. In our view, this partly reflects growing demand in manufacturing construction as the U.S. ramps up its reshoring initiative. Census Bureau data showed that manufacturing construction spending surged by a record 80% YoY in June.
  • Regional demand in new-home building in San Antonio, Houston and Dallas might also be helping. Our analysis shows that these cities may face a longer-term housing shortage and are seeing higher construction trends than the rest of the country.

Read our full analysis for a more in-depth look at these trends.

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.