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Report: Small business profits decline as fuel costs rise and payroll growth slows
ColoradoBiz Staff //May 19, 2026//
Courtesy of Bank of America.
Courtesy of Bank of America.
Report: Small business profits decline as fuel costs rise and payroll growth slows
ColoradoBiz Staff //May 19, 2026//
In Brief:
- Small business profits fell 1.3% year over year in April
- Gasoline spending growth surged nearly 31% year over year
- Payroll growth slowed overall but rose in agriculture and health services
- Southern metros led payroll gains, western metros showed weakest growth
Small business profitability fell 1.3% year over year in April, the weakest reading in two years, as higher fuel costs and slowing sales pressured margins, according to new Bank of America small business account data.
The report found that small business sentiment also weakened as rising prices and labor concerns continued to weigh on owners across industries.
Gasoline spending growth per small business client surged nearly 31% year over year in April, far outpacing overall card spending growth, according to the report. Transportation, agriculture, and construction firms were among the hardest hit because fuel accounted for a larger share of their operating costs.
Bank of America data showed payroll growth among small businesses continued to slow overall, though some sectors, including agriculture, transportation, retail and health services, posted gains in April. Transportation payrolls were boosted by demand for couriers and messengers, while health care remained a steady source of job growth.
The report also noted that finding qualified workers remains the top concern among small business owners, citing National Federation of Independent Business survey data.
Regionally, payroll growth was strongest in several Southern metro areas, led by San Antonio. Four of the seven metro areas posting positive gains were located in the South. Meanwhile, Western metro areas recorded the weakest payroll growth, including San Francisco, San Jose, Los Angeles, Phoenix and Las Vegas. Las Vegas experienced the steepest slowdown, with payroll growth down about 10 percentage points from 2025 levels.
The report found California, Texas, Florida, New York and Georgia had the largest number of small businesses overall, though many Southern states had a smaller share of workers employed by small firms compared with other regions.
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