Small Business Checkpoint: Business formation boom

New business formation is booming and is notably strong in the healthcare sector, which is seeing spending and profit growth.

Headshot of Anna Zhou

Anna Zhou

Headshot of Taylor Bowley

Taylor Bowley

September 2023

Key takeaways

  • Even as the economy moderates, new business applications remain elevated this year. The accommodation & food services and healthcare sectors show particular strength, likely fueled by continued consumer demand for leisure and the limited supply of healthcare services, respectively.
  • According to Bank of America internal data, small business spending is strongest among healthcare firms with total payment per small business client up 8% year-over-year (YoY) in August. Moreover, these companies are also seeing stronger profits than the overall trend.
  • Looking more broadly at small business activity in August, payments per small business client were down 2.4% YoY as high operating costs weigh on spending elsewhere. According to the Bank of America Summer 2023 Small Business Owner Pulse Survey, 70% of small businesses with a physical location have had to deal with rising utility bills and high property taxes.

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.