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Small Business Checkpoint: Productivity push
Small business profits and tech spending rose in February, but hiring intentions and payroll growth remain muted.
March 2026
Key takeaways
- Small business profitability in February improved despite cost pressures. It rose 1.2% year-over-year (YoY) in February to the strongest reading since March 2025, according to Bank of America small business account data. For those small firms with <$500K in annual revenue, there was a notable rebound.
- Hiring signals are cautious but stabilizing. Bank of America's alternative hiring indicator shows small business payments to hiring firms increased month over month in February after a January dip, hinting at tentative hiring ahead though payroll growth per small business client remained negative.
- Small-business spending on tech services (including AI) surged more than 14% YoY in February, with small retailers leading and manufacturing close behind. Against this broader backdrop, business formation continued to rise — yet fewer applicants indicated plans to hire — suggesting that new firms are prioritizing productivity gains before expanding their workforce.
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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