This article covers:
• Fiserv Small Business Index reveals growth in April 2024
• Service sector offsets slowdown in discretionary spending
• Small business sales increase 5.6% year-over-year
• Retail and service sectors exhibit different growth dynamics
• Fiserv’s data as a broader economic indicator
April 2024 Insights
Despite headwinds in the economy and a noticeable slowdown in discretionary spending, the resilience of the small business sector shines through, as evidenced by the April 2024 Fiserv Small Business Index. This period saw a notable increase in sales, especially within the service sector, highlighting a significant shift in consumer spending patterns. According to Prasanna Dhore, Chief Data Officer at Fiserv, while discretionary spending has decelerated, there has been an "appreciable gain in service-based business spending," underscoring the dynamic nature of the current economic landscape.
Fiserv, a leading global provider of payments and financial services technology, reports that its Small Business Index, a gauge of the performance of small businesses across the United States, climbed to a score of 145 in April 2024. This represents a 4-point increase from March 2024, with small business sales growing 5.6% year-over-year and 2.2% month-over-month. This growth, occurring in both national and state levels, provides a nuanced view of the economic vigor within the small business sector, particularly in retail and service businesses.
Sector-Specific Trends
The divergence in performance between the retail and service sectors is particularly telling. While both sectors have seen growth, the service sector’s substantial contribution to the economy has become increasingly apparent. This sector, which includes professional services such as tax preparation, has benefitted from the shifting consumer spending, which now favors essential and service-based expenditures over discretionary items.
This trend not only highlights the adaptability of consumers in response to economic pressures but also the agility of small businesses in navigating through changing market conditions. The growth in the service sector, in particular, underscores the broader economic trend towards a more service-oriented economy, marking a departure from traditional retail spending.
Economic Indicators
The insights provided by the April 2024 Fiserv Small Business Index extend beyond mere numbers. They offer a window into broader economic trends, signaling a potentially significant shift in the way consumers prioritize their spending. The data suggests that despite the challenges posed by a slowdown in discretionary spending, the American economy, particularly the small business segment, remains robust.
This resilience is further underscored by the year-over-year and month-over-month sales growth, indicating not just a recovery from a "sluggish" March, as the index describes, but also a potential realignment of consumer spending habits. Such a realignment, favoring services over goods, could have lasting implications for economic policy and small business strategies alike.
In conclusion, the April 2024 Fiserv Small Business Index not only highlights the enduring strength and adaptability of the small business sector but also serves as a broader economic indicator. The shift towards service-oriented spending, coupled with the resilience of small businesses, suggests a complex but optimistic economic outlook. As we move forward, it will be essential to monitor these trends closely, for they will not only shape consumer behavior but also inform policy decisions and business strategies in the post-pandemic world.
