As businesses have adjusted to working with work-at-home employees and contingent workforces hired as needed, they spent 13.5% more year over year in the third quarter, according to a business spend index based on from e-procurement company Coupa Software Inc.
The Coupa Business Spend Index also showed third-quarter increases of 41% in spending on contingent workforces and 29% in business spending for shipping and freight services.
“The Coupa BSI Q4 Outlook indicates that business spend sentiment is continuing to recover from its sharp drop in Q1 as companies grow increasingly comfortable operating in the new normal,” says Jeff Collins, chief economist at Coupa. “However, despite the positive adjustments made by companies in most major sectors, our analysis shows that confidence in the economy is still low and is likely to remain below trend for at least the next three to six months.”
The Coupa BSI also noted third-quarter decreases in spending of 97% on air travel and 22% on office supplies.
But Collins notes that Coupa’s Q4 outlook shows that overall business spend sentiment increased 6% over the prior quarter but was still lower than a year ago. “Spend data indicates that, overall, business spend sentiment is continuing to increase from its sharp drop in Q1,” he says.
Coupa bases spend sentiment on spend per person, average time to approve spend decisions, and average rate of spend approval/rejection. It compiles these metrics by analyzing “billions of dollars of anonymized transactions from the Coupa’s cloud-based Business Spend Management platform of e-procurement and spend-management applications.
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