On Thursday Coupa Software, which has processed approximately $1.8tn in business spend, announced the results of its latest Business Spend Index.
The data, based on the spending habits of more than 1,300 companies worldwide, showed that quarterly spending on technology increased slightly (+1.4%), while the data indicated a major boost to shipping & freight (up 128.8%). This dramatic increase could be partially attributed to companies beginning to reopen and fulfil a backlog of production orders that had occurred during the previous quarter.
Businesses also looked to hire an increased number of freelancers and contractors, as spending in the contingent workforce category increased by 31% when compared to the previous quarter. This could indicate a lack of confidence from businesses to take on permanent staff members or rehiring of temporarily laid off contingent workers.
The Business Spend Index also showed the extent of the impact caused by enforced working from home policies:
- Spending on hospitality, which includes things such as hotels and rental cars, was down by 54.4% when compared to the previous quarter
- Spending on office supplies was also down by 42%, spending on telecommunications was down by 38.4% on the previous quarter.
- Unsurprisingly, business spending on travel has been severely impacted since the onset of the pandemic. Spending is down roughly 98% when compared to the same time last year.
“This quarter’s Business Spend Index showed a mixed picture – with modest improvements in some industries and categories compared to the previous quarter. However, overall activity is significantly depressed. Unprecedented numbers of laid off and furloughed workers are having a significant impact on some sectors, but we have yet to see the reduction in economic activity play out completely.
“For example, the BSI for financial services indicates the sector is anticipated to perform relatively well in the coming quarter but as people struggle to make debt payments the outlook will likely change. Confidence in the economy is still low and given concerns about a resurgent growth in new COVID-19 cases, that is unlikely to change in the near-term,” said Jeff Collins, Chief Economist at Coupa Software.