American Express was bolstered by a surge in demand for its card services from small and mid-sized U.S. businesses during the COVID-19 era, but now the company’s management is waiting for a return of that growth.

For the first quarter, billed business from that segment of corporate customers increased 1% over the same period last year, according to an earnings report from the company on Friday. By contrast, billed business from large U.S. companies and global clients rose 5%.

The meager growth in U.S. SMB business is not insignificant for Amex because that segment of customers contributes 81% of its commercial services billed business, dwarfing the 19% contributed by larger businesses. As a result, overall billed business for commercial services climbed 2% to $127 billion. That SMB business grew 1% in the fourth quarter last year as well, compared to the same period in 2022.

“We think that this is macro-driven and we have a ton of data that confirms that and the rest of the industry is experiencing similar trends,” Amex Chief Financial Officer Christophe Le Caillec said during a call with analysts Friday. 

His description of the economic environment came in response to an analyst on the call asking about stagnant SMB growth.

That SMB clientele is being careful with their cash flows at the moment, after experiencing significant growth in prior years, precipitating the current slowdown, Le Caillec explained.

Amex CEO Stephen Squeri doubled down on that explanation. Bigger inventories at the SMBs and higher interest rates have cramped their demand for card services, he explained. Those businesses had “tremendous growth” during the COVID-19 era and that wasn’t “sustainable,” he said during the call.

As the deadly COVID-19 pandemic led consumers to stay home and more ensconced in their neighborhoods, smaller businesses reaped the benefit of local consumer demand. The SMB entrepreneurial spirit was also buttressed by government relief loans.

In the first quarter last year, the SMB billed business was still growing at a much faster clip, rising 6% for that quarter over the same quarter of 2022. For now, the New York-based company is waiting on the return of the SMB appetite for services. “When they’re ready to come back, we’re there for them when they want to spend even more,” Squeri said regarding SMBs.

While SMB spending remained “soft” during the first quarter, Squeri noted on the call that new SMB customer acquisitions and retention were “strong.” The company declined to provide acquisition and retention figures. 

Payments flow from the company’s consumer customers is a much larger part of Amex’s business. Consumer billed business rose 8% to $153 billion for the first quarter, compared to the year-earlier period, according to the earnings report.

“We continue to believe American Express has several levers that support its aspirational top-line growth targets that call for double-digit revenue growth,” William Blair analyst Cris Kennedy said in a Friday note to clients regarding Amex’s first quarter results.

Amex’s first quarter net income rose 34% to $2.44 billion over the year-ago period as revenue for the quarter, net of interest expense, climbed 11% to $15.8 billion, according to the company’s earnings release.