Read our full analysis for a more in-depth look at these trends.
Small Business Checkpoint: Planning for the unexpected
Small business formation and employment growth remains strong, but uncertainty is weighing on spending.
March 2025
Key takeaways
- Despite continued optimism, small business uncertainty is on the rise in the midst of increasingly volatile market and policy conditions. In response, according to Bank of America aggregated credit and debit card data, small businesses are slowing their card spending across the board.
- This change in sentiment and capital expenditures could slow new business formation. Across sectors, retailers have been notably strong, whereas manufacturing, construction, and finance have contracted. Notably, for small manufacturing firms with annual revenues of <$ 500K, their payments growth fell 5.7% year-over-year (YoY) in February.
- As new business formation returns to pre-pandemic levels, and job creation falls, this could stall overall productivity growth. And though small business hiring grew 12.3% YoY in February, this has fallen from inflation-adjusted 2019 average levels, suggesting in an uncertain economic environment, the small business labor market could slow.
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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