For much of 2025, the economic narrative was optimistic. But small business data tells a different story.
A new report from Xero, the global small biz platform, shows small business sales growth averaged just 2.4% last year - about half the long-term norm. In Q4, growth slowed to 0.9%, the weakest pace since 2023, despite late-year rate cuts.
The slowdown stands in contrast to stronger headline indicators and market performance in 2025 - underscoring a widening gap between broader business signals and small business reality.
The past year was a volatile one for small business sales as owners, and their customers, responded to frequent changes in economic policy settings, heightened uncertainty and disrupted supply-chains.
Even so, late payment data showed continual improvement over the year. There was a similar improving trend, although not as large, in the average length of time small businesses must wait to be paid after they issue invoices to their customers.
Overall, the Xero Small Business U.S. Insights seem to highlight the "disconnect between Main Street and Wall Street."
For more details, and to read the report as a whole, please access the Xero Small Business Insights U.S. HERE.
Disclosures:
Content has been summarized from content furnished by Peppercomm on behalf of Xero. Survey results were based on Xero Small Business Insights data and publicly available data for the purpose of informing and developing policies to support small businesses Changes were made to the XSBI methodology in 2025. This includes changing the definition used for a small business and the way we identify region-based businesses. Full details of the methodology used to construct Xero Small Business Insights can be found here. For additional details regarding the data, see this website.
Insightful Accountant published this feature for educational and informational purposes only. This is NOT sponsored content. Insightful Accountant is not responsible for the summary, data or conclusions presented in the Xero survey.
Xero is a global small business platform that helps customers supercharge their business by bringing together the most important small business tools, including Accounting, Payroll, and Payments, on one platform. Xero’s powerful platform helps customers automate routine tasks, gain timely insights, and connect with their data, apps, and accountant or bookkeeper, so they can focus on what really matters. Trusted by millions of small businesses, accountants, and bookkeepers worldwide, Xero makes life better for small businesses, their advisors, and communities around the world.
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