Coupa Business Spend Index Reveals that Business Spend Sentiment is Improving, but Remains Below Trend
Following a quarter of modest improvement in corporate spending, the Coupa BSI suggests that businesses are continuing to adjust to the new normal and are beginning to return to pre-COVID spending levels, albeit at a slower rate than in the prior quarter. Though still cautious about the global economic outlook, businesses are spending more in areas related to remote work, such as technology, shipping and freight, and contingent workforce support.
Data from the past quarter shows the following year-over-year changes in business spending:
- 97 percent decrease in business spending on air travel
- 22 percent decrease in business spending on office supplies
- 13.5 percent increase in business spending on technology, including hardware, software, and services
- 41 percent increase in contingent workforce spend
- 29 percent increase in business spending for shipping and freight
"The Coupa BSI Q4 Outlook indicates that business spend sentiment is continuing to recover from its sharp drop in Q1 as companies grow increasingly comfortable operating in the new normal," said
What to Expect in the Coming Months
- Businesses Overall: Spend data indicates that overall, business spend sentiment is continuing to increase from its sharp drop in Q1 but is still below the trend line.
- Financial Services: Despite rising default risk, business spend sentiment for financial services improved over the last two quarters and looks set to deliver solid growth for the next three to six months.
- Health and Life Sciences: Spend sentiment for health and life sciences increased significantly since last quarter. The sector likely benefited from the reduction in COVID-19 cases at the end of the summer and the return of elective surgeries.
- High Tech: The impact the pandemic has had on remote work has been largely beneficial for the tech sector, and as a result high tech held a steady increase in business spend sentiment quarter-over-quarter.
- Manufacturing: Spend sentiment for manufacturing continues to decline, and as a result, contribution of the sector to GDP is likely to decline over the next three to six months.
- Retail: Business sentiment in the sector indicates that retail has improved modestly; however, the sector is still below trend likely related to multiple retailers filing for bankruptcy in 2020.
To view the Coupa BSI Q4 2020 Outlook in its entirety, visit www.spendindex.com.
Disclaimer: The findings of the BSI are not necessarily indicative of trends happening with Coupa's business.
The Coupa BSI Methodology
The Coupa BSI is an early indicator of potential economic growth based on current business spending decisions of hundreds of
The Coupa BSI is normalized to a baseline value of 100, which represents the weighted composite value of the three components in the baseline reference period (
Coupa empowers companies around the world with the visibility and control they need to spend smarter and safer. To learn more about how Coupa can help you spend smarter, visit www.coupa.com. Read more on the Coupa Blog or follow @Coupa on Twitter.
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Stefanie Gordish, email@example.com, 415-590-9722