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NEW YORK–(BUSINESS WIRE) – American Express (NYSE: AXP) today released the Global Business Spend Indicator (GBSI), a new survey of global corporations conducted with the Center for Business and Economic Research (CEBR) ². The survey shows that US companies are the most optimistic and optimistic about B2B spending among the six countries surveyed. 76% of US companies are optimistic about their prospects for the next 12 months. Respondents forecast that B2B spending in the US will average 3.4% higher in the second quarter than in the same period last year. Applying this survey respondents’ forecast to broader macroeconomic data in the US would translate into an estimated $ 140 billion in additional B2B spending by US companies³.

“B2B spending is a major contributor to the overall health of the economy. The GBSI study shows US companies are investing and spending more to adapt to new operating methods or to digitize and streamline their operations during the pandemic. ” said Dean Henry, EVP, Global Commercial Services at American Express. “It also shows that some of the trends that emerged or accelerated during the pandemic, such as the automation of payments and new approaches to supply chain management, are likely to stay here.”

CEBR estimates that the value of B2B spend per year is nearly half (48%) of gross output (total value of sales or revenue) in the US economy. This means that for every dollar spent in the US economy, roughly 48 cents are B2B transactions.

The GBSI is designed to conduct a survey of more than 3,600 companies of all sizes and industries in the UK, Australia, Canada, Japan, Mexico and the US to examine the importance of corporate spending in both the global and local economies Classifies goods and services that one company buys from another company in order to keep its business going. The survey examined nine B2B spending categories and three additional categories of Taxes, People / Labor, and Travel, Entertainment, and Spending to get a solid view of the dynamics and impact of overall business spending.

Raw or Processed Materials Top B2B Spend Categories

The US companies surveyed said they had increased their total B2B spend in all core categories since the start of the year. According to survey participants, the highest growth rates were recorded in spending on raw materials or processed materials such as sawn timber, metals and chemicals, which rose by an average of 6.2% between the first quarter of 2020 and the first quarter of 2021. That would translate into an estimated $ 37 billion in additional spending when applied to US macroeconomic data, most likely due to soaring commodity prices after the pandemic broke out.

This trend is expected to continue. The US companies surveyed expect a further increase in expenditure in this category by 6.4% compared to the previous quarter from the second quarter of 2021.

US companies are leaders in payment automation and plan to continue investing in the coming year

Within the technology spend category, automation is the fastest anticipated area of ​​growth among US companies surveyed. While many companies have already digitized their B2B payments in recent years, the pandemic has helped accelerate this trend more generally.

The GBSI found that of the six countries surveyed, US companies have the highest level of automation in most business functions, including purchasing / procurement, payroll, supplier payment, supplier analysis, and synchronization of payments with the existing general ledger. In fact, nearly half of US companies surveyed said they automate most or all of the processing (48%) and receiving (51%) of payments from business customers. Additionally, more opportunities are ahead as nearly half (46%) plan to automate or further automate each of these functions in the next 12 months.

With increased automation, US companies could significantly reduce their reliance on manual payment methods – such as writing and sending physical checks – which are still widely used. 33% of US business spend currently uses physical payment methods, according to companies surveyed.

Overall, technology spending of the US companies surveyed increased an average of 4.1% between Q1 2020 and Q1 2021, which corresponds to an estimated $ 25 billion in additional spending on US macroeconomic data, which is likely due to rapid digitization from companies such as e-commerce functions or website improvements. Almost a quarter (22%) of US companies surveyed see an increase in their online presence under the top three goals, and 39% expect they will expand their use of virtual cards in the next 12 months.

US companies prioritize optimized and flexible supply chain relationships

For many companies, the experience during the pandemic showed ways to streamline and find more flexible ways to manage their supply chains and operating practices.

In the past 12 months, 23% of US companies surveyed have taken steps to simplify their supplier network, 23% have reduced or avoided long-term commitments to purchase from certain suppliers, and 22% have selected suppliers with more flexible payment terms.

looking ahead

Over the next 12 months, US companies in the survey said increasing profitability (34%), securing new business or attracting new customers (32%), and maintaining competitiveness (31%) were their top three Goals count.

GLOBAL BUSINESS SPEND INDICATOR BY AMERICAN EXPRESS METHODOLOGY

American Express’s Global Business Spend Indicator uses survey data from more than 3,600 companies in Australia, Canada, Japan, Mexico, the United Kingdom, and the United States. Together, these countries account for around two-fifths of global economic output, which makes the GBSI a key influence on conditions in the business-to-business spending landscape (B2B). In each country there have been a similar number of retailers, small businesses (with 1-9 employees), small businesses (with 10-49 employees), medium-sized businesses (with 50-249 employees) and large companies (with 250+ employees) surveyed in order to gain a holistic insight into the diversity of perspectives and experiences within the corporate population.

The B2B expense categories include: raw or processed materials; Capital investments and operating expenses; Technology; Construction, construction, maintenance and installation; Finished goods; Advertising, sales and marketing; business and professional services; Utilities; Financial services. Other categories of business expenses are: taxes and licenses; Travel, entertainment and expense reports; People / workers.

The survey on which this edition of GBSI is based was carried out by Opinium Research between March 18 and April 12, 2021. The sample consists of high-level decision-makers who are responsible for 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 to April, May and June and Q4 to October, November and December. The sample included 1,044 respondents in the US, 528 in Australia, 515 in Canada, 516 in Japan, 544 in Mexico, and 537 in the UK. At a confidence level of 95%, this equates to a 3% error rate for the US sample and a 4% error rate for Australia, Canada, Japan, Mexico, and the UK.

Estimates of the change in spending in US dollars in the six countries are calculated based on the proportion of total spending that each category represents among companies in the survey, along with the average change in reported spending. The base level of business expenditure is estimated using the most recent available national accounts data on intermediate consumption, gross fixed capital formation and employee compensation. The 2020 figures are based on the assumption that changes in business spending in each country are proportional to GDP.

ABOUT AMERICAN EXPRESS

American Express is a globally integrated payments company that provides customers with access to products, insights, and experiences that enrich lives and drive business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, instagram.com/americanexpress, linkedin.com/company/american-express, twitter.com/americanexpress and youtube.com/americanexpress. Key Links to Product, Service, and Corporate Responsibility Information: Fee & Credit Cards, Business Credit Cards, Travel Services, Gift Cards, Prepaid Cards, Merchant Services, Accertify, Kabbage, Corporate Card, Business Travel and Corporate Responsibility.

ABOUT THE CENTER FOR ECONOMY AND BUSINESS RESEARCH

The Center for Economic and Corporate Research is an independent consultancy with a reputation for solid business consultancy based on thorough and insightful research. Since 1992, Cebr has been a leader in corporate and public interest research. They provide analysis, forecasting and strategic advice to large UK and multinational corporations, financial institutions, government departments and agencies and trade organizations. More information about Cebr can be found at www.cebr.com.

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1 Percentages correspond to the proportion of US companies that largely or completely automate the process of paying to suppliers or receiving payments from business customers.

2 CEBR is a leading business consultancy specializing in economic forecasting and analysis.

3 Estimates of change in spending in US dollars in the six countries are calculated based on the percentage of total spending that each category represents among companies in the survey, along with the average change in reported spending. The base level of business expenditure is estimated using the latest available national accounts data on intermediate consumption, gross fixed capital formation and employee compensation. The 2020 figures are based on the assumption that changes in business spending in each country are proportional to GDP. The US dollar changes presented specifically for the US market are based only on the responses from the US companies in the sample.