Payments and financial services technology provider Fiserv, Inc. has published the Fiserv Small Business Index™ for July 2024. Nationally, the seasonally adjusted index for July rose to 141. This jump in consumer spending followed a four-point decline in June, the index states.
“The Fiserv Small Business Index provides timely and granular insight into consumer spending at small businesses, which is often a bellwether for the broader economy,” said Jennifer LaClair, head of Merchant Solutions at Fiserv, in a news release. “Following modest declines in June, consumer spending rebounded nicely in July to help many small businesses start the second half of the year strong.”
On a year-over-year basis, both small business sales (+3.5%) and transactions (+3.3%) grew compared to July 2023. Month-over-month small business sales grew (+1.3%) despite transactions slightly declining (-0.7%).
“Consumer spending patterns continue to shift, most notably with Retail spend experiencing a decisive bounce back compared to June,” said Prasanna Dhore, chief data officer at Fiserv, in the release. “Specialty trade and professional services also performed very well due to seasonal demand and stabilizing inflation rates.”
Strong Retail Growth
July saw strong retail spending growth as the national retail index rose by four points to 146. Year-over-year retail sales (+4.6%) and transactions (+5.8%) increased and all retail subsectors showed growth compared to June, according to the index. General Merchandise (+10.9%) led retail in yearly growth, followed by Health and Personal Care (+8.6%), Building Equipment and Garden Materials (+6.2%), Food and Beverage Retailers (+4.9) and Furniture, Electronics and Appliances (+4.7%).
On a monthly basis, retail sales (+2.5%) and transactions (+0.1%) grew as higher average ticket sizes drove short-term spending, even though foot traffic remained relatively flat. Motor Vehicle and Parts Dealers (+4.8%) and Furniture, Electronics and Appliances (+4.8%) led growth compared to June, followed by General Merchandise (+3.5%) and Health and Personal Care (+3.1%), the index states.
A Slight Decline at Restaurants
Food Services and Drinking Places indexed at 123 for July, a 4-point decline from June. On an annual basis, restaurant sales declined (-1.6%) despite seeing modest growth in foot traffic (+0.7%), according to the index. Consumers dining out have also seen a significant decrease in average ticket size (-2.4%) compared to July 2023.
Month-over-month restaurant sales (-3.1%) and transactions (-1.4%) both decreased compared to June 2024, marking a second consecutive month of slowing restaurant sales and foot traffic. Similar to the yearly trend, average ticket sizes also declined (-1.7%) on a monthly basis – indicating that consumers may be feeling some pricing relief when dining out, the index states.
Other Small Business Movers
Professional, Scientific and Technical Services continue to see significant growth in sales (+15.2%) and transactions (+13.9%) year-over-year. Month-over-month performance was strong as well with both total sales and transactions growing (+3.6%) compared to June, according to the index. Gains in this industry were across a broad range of services, some of which saw increased demand following harsh weather events in June.
Specialty Trade Contractors grew sales (+5.7%) and transactions (+2.5%) year-over-year, the index states. Month-over-month sales (+3.0%) also rose despite total transactions (+0.1%) holding steady. Demand for air conditioning and related services drove most of the spending increase, along with broader demand for general construction and carpentry. Additional year-over-year growth categories included Web Search, Libraries and Information Services (+20.4%), Amusement/Gambling/Recreation (+8.3%) and Food Manufacturing (+8.1%); the sharpest annual declines were in Real Estate (-12.3%) and Transportation Equipment Manufacturing (-10.5%).
Utilities (+6.2%) and Hospitals (+5.7%) were the fastest growing small business categories on a monthly basis; Performing Arts, Spectator Sports and Related Industries (-2.4%), Accommodation (-1.2%) and Insurance (-0.1%) each saw modest month-over-month declines, according to the index.
