Economic Turning Point? New American Express Survey Shows Signs of Renewed Optimism for 2021 As B2B Spending Rises
As COVID-19 restrictions loosen, the new Global Business Spend Indicator by American Express shows that Canadian businesses are spending more
- While still down from Q1 2020, business travel, entertainment and expense spending increased 8.3% between Q4 2020 and Q1 2021.
- 72% of Canadian businesses feel positive about their prospects over the next 12 months.
- More than a third (36%) of Canadian businesses identified remaining competitive as one of their top three goals for the next 12 months.
TORONTO, July 8, 2021 /CNW/ - American Express today launched the Global Business Spend Indicator (GBSI), a new survey of global businesses conducted with the Centre for Business and Economic Research (CEBR).1 The survey has revealed signs of renewed confidence in the 2021 economic outlook as business-to-business spending levels have started to rise.
While businesses have been forced to adapt to lockdown restrictions and supply chain disruptions, Q1 2021 was a turning point for B2B spending. While still down from Q1 2020, business travel, entertainment and expense spending increased 8.3% between Q4 2020 and Q1 2021. However, according to the Global Business Spend Indicator (GBSI) survey, Canadian businesses predict their Q2 2021 B2B spend will be an average of 0.1% higher compared to the same time last year – signalling only a small recovery in B2B spending that equates to an estimated additional USD $0.30bn in Canada.
"Canadian businesses have plans to grow in 2021, and that is going to boost the health of the Canadian and global economies," said Paul Roman, Vice President & General Manager, Global Commercial Payments at American Express. "While it is important to recognize that the operating landscape has changed dramatically, overall spending levels suggest that recovery is evident for businesses."
Canadian Businesses Harnessing the Power of Technology to Fuel Business Growth
Canadian businesses revealed that technology was one of the fastest growing B2B spending categories. Within the technology category, automation was the fastest growing item in the first half of the year. Spending on automation technology is also set to increase by an average of 8.3% between Q4 2020 and Q2 2021. While many businesses have already been digitizing B2B payments over the past few years, the pandemic helped accelerate this trend. In addition, spending on ecommerce technology is set to increase by an average of 6.9% between Q4 2020 and Q2 2021.
Flexibility and Simplification are Essential to Canadian Businesses
For many Canadian businesses, the pandemic highlighted ways to streamline supply chains and operating practices. At present, 38% of Canadian businesses say that flexibility of payment terms is very important to them when they choose or evaluate their network of suppliers.2 About 22% say that this has become even more important considering the pandemic. Over the past 12 months, 20% of Canadian businesses have simplified their network of suppliers and 30% have looked for lower cost items and suppliers.
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1 CEBR is a leading economics consultancy specialising in economic forecasting and analysis. |
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2 This share reflects the share of businesses that selected a score of 8 or higher when asked to rank the importance of flexibility of payment terms on a scale of 0 to 10 |
Looking Ahead
Over the next 12 months, Canadian businesses in the survey cited remaining competitive (36%), increasing profitability (34%) and securing new business (34%) as being among their three most important goals.
"The future for Canadian businesses is looking brighter and the resilience of these business owners continues to amaze us here at American Express", said Roman. "The past year has certainly presented unforeseeable challenges, but the tenacity and strength felt among Canadian business owners is truly inspiring."
CONTACTS:
AMERICAN EXPRESS CANADA
Jessica Myers - [email protected]
GLOBAL BUSINESS SPEND INDICATOR BY AMERICAN EXPRESS METHODOLGY
The Global Business Spend Indicator by American Express leverages survey data from more than 3,600 companies across Australia, Canada, Japan, Mexico, the UK and the U.S. Together, these countries account for around two-fifths of global economic output, making the GBSI a key bellwether of conditions in the business-to-business (B2B) spending landscape. In each country, a similar number of sole traders, micro businesses (with 1-9 employees), small businesses (with 10-49 employees), medium-sized businesses (with 50-249 employees), and large businesses (with 250+ employees) have been surveyed, providing a holistic insight into the diversity of perspectives and experiences that exist within the business population.
B2B spend categories include: raw or processed materials; capital investments and operating expenditure; technology; building, construction, maintenance and installation; finished goods; advertising, sales and marketing; business and professional services; utilities; financial services. Broader business spend categories include: taxes and licensing; travel, entertainment and expenses; people/workforce.
The survey underpinning this edition of the GBSI was conducted by Opinium research between 18th March and 12th April 2021. The sample is comprised of senior decision makers with responsibility over at least three categories of expenditure. In this report, Q1 refers to the first three months of the calendar year (January, February, and March), Q2 refers to April, May and June and Q4 refers to October, November and December. The sample comprised 1,044 respondents in the U.S., 528 in Australia, 515 in Canada, 516 in Japan, 544 in Mexico and 537 in the UK. At a 95% confidence level, this equates to a 3% margin of error for the U.S. sample and a 4% margin of error for Australia, Canada, Japan, Mexico and the UK.
Estimates of the $ change in spending across the six countries are computed based on the proportion of total spend that each category accounts for among businesses in the survey together with the average change in spend reported. Baseline levels of business spending are estimated using the latest available national accounts data on intermediate consumption, gross fixed capital formation and employee compensation, with figures for 2020 computed based on the assumption that changes in business spending in each country are proportional to GDP.
About American Express in Canada
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. American Express was established in Canada in 1853 and offers a variety of consumer and business products. Learn more at americanexpress.ca and connect with us on Facebook, Twitter, YouTube and Instagram.
ABOUT THE CENTRE FOR ECONOMICS AND BUSINESS RESEARCH
The Centre for Economics and Business Research is an independent consultancy with a reputation for sound business advice based on thorough and insightful research. Since 1992, Cebr has been at the forefront of business and public interest research. They provide analysis, forecasts and strategic advice to major UK and multinational companies, financial institutions, government departments and agencies and trade bodies. For further information about Cebr please visit www.cebr.com.
SOURCE American Express Canada
Jessica Myers, American Express Canada, [email protected]
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