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.
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.”