The Bank of America Institute today released a new publication that finds continued resilience in small businesses. New small business data from Bank of America shows that, despite economic headwinds, small businesses continue to strengthen in a variety of areas, including credit and debit card spending, business travel spending and payroll payments. Overall, small business payments per customer were up 11% year-over-year in August, up from 3% year-over-year the previous month. Card spending per customer rose 13% year-over-year last month, beating July’s growth rate of 7%.
One of the main reasons for the continued resilience of small businesses is the return of business travel. According to the US Travel Association, business travel accounted for more than a quarter of total travel spending in the United States before the pandemic. Bank of America internal data indicates that the number of travel transactions per small business customer is at 90% of the 2019 annual average, the highest level since the start of the pandemic. This includes airlines, accommodation, cruise lines, travel agencies, car rentals and other means of transport. Otherwise, small business card spending per customer for travel rose 31% year-over-year in August, compared to 19% in July.
Small businesses also continue to see strength in payroll payments. Overall average salary spend per customer increased 11% year-over-year in July on a 3-month rolling average, suggesting strong momentum in recruiting and salary growth. Restaurant and bar wage payments are declining from recent highs, to a still-resilient 18% year-over-year in August.
Other highlights from the release include:
- Spending on small business cards varied widely across annual revenue brackets, and small businesses with higher annual revenues spent at a faster rate than those with lower annual revenues.
- For small businesses with annual sales over $1 million, card spend per customer for travel grew the most, at 43% year-over-year in August. This increase was partly due to a reversal of depressed levels of business travel spending last August due to the spread of the Delta variant.
- After-tax earnings based on Bank of America’s internal consumer deposit data for small business customers increased 6.1% year-over-year on a 3-month rolling basis in August (for more information, please see our latest consumer checkpoint). That tops data from the Bureau of Labor Statistics, which finds average hourly wages for August rose 5.2% year-over-year.
“Despite economic headwinds like high inflation, small businesses are approaching the fall with cautious optimism,” said Anna Zhou, an economist at the Bank of America Institute. “We see things like the rebound in small business travel and the resilience of payroll payments as further evidence that the economy is getting back on track.”
Small Business Checkpoint is a regular publication of the Bank of America Institute. It aims to provide a real-time assessment of the spending activities and financial well-being of small businesses, leveraging the depth and breadth of Bank of America’s proprietary data. This data is not intended to be representative or indicative of Bank of America’s operating results, financial conditions or performance and should not be relied upon as such.
See the Small Business Checkpoint for methodology and definitions.
The Bank of America Institute is dedicated to uncovering powerful ideas that move business and society forward. Established in 2022, the Institute is a think tank that draws on data and analysis from across the bank and the world to provide timely and original insights into the economy, environment, social and governance (ESG), and the overall transformation. The Institute taps into the depth and breadth of the bank’s proprietary data, from 67 million retail and small business customers, 54 million verified digital users, $3.8 billion in total payments in 2021 and 1, $4 billion in consumer and wealth management deposits. From this solid data set, the Institute offers a unique perspective on the health of the economy. It also elevates thought leadership across the bank that addresses long-term trends and shares those findings with the general public.
Bank of America is one of the world’s leading financial institutions, serving individuals, small and medium-sized businesses, and large corporations with a full range of banking, investment, asset management, and banking products and services. other financial and risk management products and services. The company provides unparalleled convenience in the United States, serving approximately 67 million consumers and small businesses with approximately 4,000 retail financial centers, approximately 16,000 ticket vending machines, and award-winning digital banking with approximately 55 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving businesses, governments, institutions and individuals worldwide. whole world. Bank of America provides industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves customers through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation Stock (NYSE: BAC) is listed on the New York Stock Exchange.
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Miranda Caruso, Bank of America
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