Technology spending from businesses has held up as enterprises reopened and employees continue to work remotely at many companies, according to the Coupa Business Spend Index.
The index (BSI) is an early indicator of business confidence and the third quarter outlook has it at 82.8, a slight increase from the previous quarter. The BSI has been volatile amid the COVID-19 pandemic.
Coupa BSI is based on anonymized spend data on the company’s platform. Coupa found that business spent on financial services with a BSI of 96.1 and health and life sciences fell to 98. High-tech spend sentiment increased slightly to 91.2 as spending per person jumped 5%. Manufacturing declined and retail saw some improvement but is well below trendlines at 69.1.
Overall, tech spending was helped by the “need to facilitate increased work from home,” said Coupa. Not surprisingly, business travel spending has tanked.
The company noted:
Going forward, the greatest risk to the US economy is a resurgence of coronavirus cases impacting operations, employment, and demand. As demand falters, many large companies will/are running out of cash. Twenty-one major retail brands have already filed for bankruptcy. Companies in other hard-hit sectors such as travel may not be far behind. Finally, other factors negatively impacting the US economy include falling oil prices as well as the reduced international trade.
According to Coupa, hospitality, office supplies, telecommunications, maintenance and consulting are all seeing declines in spend. Technology is showing slight gains with contingent workforce and shipping and freight spending surging.