Fiserv: SMEs ‘Hold Firm’ in 2024 – Consumer Spend ‘Steady’

Fiserv releases its Small Business Index Report for January 2024, with month-on-month SME sales growth flat at +0.1%, impressive after a busy December 2023

In its Small Business Index Report for January 2024, Fiserv reveals that small and mid-sized enterprises (SMEs) across the US have remained resilient in the face of persistent macroeconomic headwinds, with consumer spending holding steady at a flat rate sales growth of +0.1%. 

While this sales growth rate may not seem much, as a month-on-month result, this gives SMEs cause for optimism after December 2023, a month that is historically consumer-spend-heavy. 

Consistent consumer spend: Positives for SMEs

Consistent consumer spending across January 2024 yielded an index of 138, per Fiserv’s small business index. Indeed, while month-on-month sales growth remained flat, the year-on-year sales growth rate figure (compared to January 2023) stood at +1.7%. 

The line chart helps to see the trend of the Fiserv Small Business Index (and the corresponding Transaction Index) across time - from January 2019 to the current month. Divergence of the lines usually coincides with external macro pressures that can influence consumer spending habits (i.e. inflation)

This is a promising marker of a well-performing economy, particularly in times when the threat of recession still lingers. 

SMEs make up over 99% of the companies operating in the US, so their performance helps to define a broader macroeconomic picture. 

For January 2024, Fiserv makes particular note of the national mix for small business spending, with consumers making the biggest spending increases in the insurance sector, building materials and DIY projects, and accommodation (hotels). 

Indeed, insurance spending has increased for many with P&C lines, in particular, seeing marked premium increases as natcats become more frequent and unpredictable. Many consumers have also taken out policies with scale-up insurtechs, helping increase SME spend in the space.

Retail outperforming other SME sectors 

As Fiserv usually finds, the retail industry outperformed other SME sectors, with a January 2024 index of 143, up 1 point over December. 

This represents a month-on-month sales growth of +0.7% for SME retailers month-on-month – +1.9% year-on-year. 

What’s more, Fiserv found that foot traffic at retailers was even more impressive, rising from the busy holiday season in December. This reflects that consumer desire for goods remains strong amid significant headwinds, with building materials, health and personal care products leading consumer expenditure. 

The states most active in continued spending at SMEs were Vermont, Hawaii, New Hampshire, Delaware and Montana. 


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