小企业检查站：仍处于盈利状态

Small Business Checkpoint: Still in the black 17 April 2025 Key takeaways •Small business optimism and real sales expectations have fallen, reversing gains from late 2024, according to the NationalFederation of Independent Business (NFIB). But both measures remain above levels seen during the past two years, and smallbusiness profitability is up in March, a continuation of increases seen since January. •Although small business profit margins are holding up, there are signs of slowing spending on discretionary business items likeadvertising. In March, the number of transactions towards business services and advertising was down -1.3% compared to thestart of the year, according to Bank of America data. The decline may be, in part, due to increased spending on inventoryfinancing. •This spending has helped boost hiring in the transportation sector. Payroll per small business client in that sector was up 15.6%year-over-year (YoY) in March, according to Bank of America data. More broadly, total payrolls grew 2.6% YoY in the firstquarter, though this is down from levels seen in the last two quarters of 2024. Small Business Checkpoint is a regular publication from Bank of America Institute. It aims to provide a real-time assessment of small businessspending activities and financial well-being, leveraging the depth and breadth of Bank of America’s proprietary data. Such data is not intended to bereflective or indicative of, and should not be relied upon as, the results of operations, financial condition or performance of Bank of America. Happiness is fleetingLast month, small business uncertainty was high, but they remained relatively optimistic despite this, according to the National Federation of Independent Business (NFIB). But now, it appears the rise in uncertainty is beginning to weigh on businessoptimism. Small business optimism has fallen from the December high and is below the 51-year average in March (Exhibit 1). In our view, small business uncertainty can weigh on growth, but Bank of America small business loans grew 8% year-over-year(YoY) in the first quarter of 2025. However, net charge-offs were also up, and NFIB real sales expectations fell significantly inMarch, highlighting small firms’views about the market outlook. Exhibit1:Small business optimism and real sales expectations fellsharply in March, but both remain above levels seen in the pasttwo yearsSmall business optimism (monthly, index, 1986 = 100, seasonally Exhibit2:In March, small business profitabilitywas up from thestart of the year and is the second highest reading in the past twoyearsSmall businessdepositaccount inflow-to-outflow ratio (monthly) adjusted (SA)) and respondents expecting higher real sales in six months(%, right-hand side (rhs), monthly) Despite these fears over the future, the ratio of payment inflows-to-outflows in Bank of America small business account data,which we view as a measure of profitability, is up from the start of the year (Exhibit 2). This may in part be due to tax refunds(read more on this in our April Consumer Checkpoint), but nevertheless, in our view, it suggests small business profit margins areholding up for now. Small businesses taper spending on business services and advertisingWhile small business profitability remains in fair shape, we find increasing evidence that businesses are pulling back on spending in certain areas (find more on this in the March Small Business Checkpoint). One notable area is advertising, with is often thought of as discretionary for most businesses and tends to be first on thechopping block when it comes to cutting back on expenses. Using Bank of America small business ACH (automated clearinghouse) payments data, the number of transactions towards business services and advertising slowed in March from the start ofthe year, falling -1.3% (Exhibit 3). This is consistent with the view of BofA Global Research, who are of the view that higher tariffs on imports seem likely to driveup inflation, lower advertiser sales expectations, and drive a pullback in brand ad spending. Meanwhile, the number of spending transactions on floor plans–when a business uses a short-term loan to purchase inventoryitems and repays the loan with proceeds from the sold inventory–is up 7.0% in March 2025 from January. This suggests somesmall businesses might be feeling a rush to stock since the beginning of the year, given the potential for price increases due totariffs. Outside of inventory financing, small businesses are still increasing their spending transactions to procure goods for sale. Thenumber of purchases to distributors increased in March from January, and small businesses within services have acceleratedtheir spending since December, currently up 10.3% YoY (Exhibit 4). Exhibit4:Small firms withintheservicessectorhave acceleratedtheir spending to distributors since DecemberSmall business ACH payments to distributors by industry (3-month Exhibit3:Small businesses appear to