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July 13, 2021

American Express Survey Finds Global B2B Spending Set to Surge with Rising Recovery Optimism

70% of businesses surveyed are optimistic about the next 12 months, with many expecting to increase their business expenditure on digital initiatives to drive growth

 

HONG KONG, July 13, 2021 – American Express unveiled the results of its inaugural Global Business Spend Indicator (GBSI), which highlighted a bullish sentiment among global businesses, with 70% companies surveyed sharing an optimistic outlook for the next 12 months.

The survey also found that overall, companies have been increasing business spending since the beginning of the year across all the core categories of business-to-business (B2B) spending and they anticipate further increases in 2021.

“While the COVID-19 pandemic has indeed posed challenges, overall optimism and rising B2B spending should give Hong Kong companies the confidence that the recovery is well under way,” said Tony Tsai, Vice President & General Manager, Global Commercial Services, Hong Kong and Taiwan, Foreign Currency Solutions, Asia Pacific, American Express.

The GBSI – which was conducted by the Centre for Business and Economic Research (CEBR) – is designed to explore the importance of business spending in both the global and local economies based on a survey of more than 3,600 businesses of all sizes and across industries in the UK, Australia, Canada, Japan, Mexico, and the U.S. For this report, B2B spend is classified as goods and services that a business purchases from another business to keep their business running. The survey looked at nine B2B spending categories, and three additional categories of taxes, people/workforce, and travel, entertainment and expenses, for a robust look at the dynamics and impact of overall business spending.

Investment in Digital Transformation will Thrive in the New Environment

The GBSI found that the technology spending category showed strong growth globally. 37% of businesses across the six countries surveyed increased their technology expenditures over the past year. On average, businesses are increasing investment in technologies such as automation and e-commerce by more than 10% between Q4 2020 and Q2 2021. These showed that businesses are eager to facilitate and enhance remote working and online commerce as new ways of operating since the pandemic.

According to the survey, spending on online advertising has also seen strong growth, which was more than twice as fast compared to the spend on print advertising quarter-on-quarter, and businesses across the six countries surveyed plan to spend an average of 2.6% more on advertising, sales and marketing in Q2 2021 as compared to Q2 2020, reflecting businesses’ prioritizing securing new businesses.

Flexibility Growingly Important Across Operations and In Supply Chain

The pandemic has highlighted the importance of being flexible and adaptable to unexpected developments, and changes to supply chains were used as a key method to build in greater flexibility. Over the past 12 months, 22% businesses surveyed have simplified their network of suppliers to increase the flexibility of their operations, 21% avoided long-term commitments to purchase from specific suppliers, and 22% had chosen suppliers with more flexible payment terms.

Global businesses also faced significant cash flow pressures during the pandemic, which had continued to impact business spending in Q1 2021. In the survey, 86% of businesses across the six countries surveyed found their cash flow over the past 12 months at least somewhat problematic.

Looking Ahead

Global businesses are no longer in survival mode and are more focused on growth. The surveyed businesses pointed to ‘increasing profitability’, ‘securing new business’, and ‘staying competitive’ as their top three business imperatives this year, and these have been reflected in how they plan to spend.

“Businesses in Hong Kong, like the global businesses surveyed, have set their eyes on driving growth and are in need of better cash flow as they emerge from the pandemic. It is crucial for them to secure alternative source of funds and greater credit flexibility during this critical time, which will enable them to strengthen resilience and take advantage of growth opportunities ahead,” concluded Mr. Tsai.

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Appendix : A snapshot of the Global Business Spend Indicator by American Express

infographic

<Download Link: https://bit.ly/3wynMq4>

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 March 18 and April 12 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

American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com/hk and connect with us on facebook.com/americanexpresshongkong, linkedin.com/companies/american-express, twitter.com/americanexpress, and youtube.com/americanexpress.

Key links to products and services: charge and credit cards, small business cards, travel cheques, merchant services, business travel, insurance, and corporate card.

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.

CONTACTS:

AMERICAN EXPRESS

Priscilla Ching
+852-2811-6327
priscilla.ching@aexp.com

Eric Chan
+852-2811-6107
eric.chan1@aexp.com

OGILVY PUBLIC RELATIONS

Gabriel Chan
+852-2884-8387
gabriel.chan@ogilvy.com

Amy Chan
+852-2884-8422
amy.chan@ogilvy.com

Source: American Express Company

Location: Greater China (Mainland China, Taiwan and Hong Kong)

Multimedia Files:

A snapshot of the Global Business Spend Indicator by American Express 5376 x 2880 png 955 KB