Business spending is on the rise in the United States, on track for a 3.4% increase in the second quarter, according to the Global Business Spend Indicator (GBSI) from American Express, released this week.
The inaugural report showed that 76% of U.S. businesses are optimistic about the next 12 months, and that the anticipated second-quarter growth equates to about $140 billion in additional B2B spending when applied to broader macroeconomic data. Companies are focused on raw materials spending, technology investment, and adapting to new supply chain operations as a result of the pandemic.
“B2B spending is an important bellwether for the overall health of the economy, and the GBSI study shows U.S. businesses are investing and spending more, whether to [adapt] to the new ways of operating during the pandemic, or to digitize and streamline their operations,” Dean Henry, executive vice president, global commercial services at American Express, said in a statement announcing the launch of the report. “It also reveals that some of the trends that have emerged or accelerated during the pandemic, such as payments automation and new approaches to managing the supply chain, are likely here to stay.”
Across nine B2B spending categories, the fastest growth rates were in raw or processed materials and technology spending, according to the survey. Spending on materials such as lumber, metals, and chemicals rose by an average of 6.2% between the first quarter of 2020 and the first quarter of 2021, equating to an estimated $37 billion in additional spend, the researchers said. The trend is expected to continue, with U.S. businesses surveyed anticipating another 6.4% rise in spending in this category from Q1 to Q2 2021. Technology spending increased 4% from the first quarter of 2020 to the first quarter of 2021, and is expected to increase 4.3% between the first and second quarters of 2021.
The survey also identified “pivots and changes” businesses made over the past year, particularly in supply chain operations and digitization:
Looking ahead, U.S. businesses cite increasing profitability (34%), securing new business or bringing on new customers (32%), and remaining competitive (31%) among their three most important goals in the next 12 months.
The GBSI is a B2B survey of more than 3,600 businesses of all sizes and across industries in the United Kingdom, Australia, Canada, Japan, Mexico, and the U.S. B2B spend is classified as goods and services that a business purchases from another business to keep their business running. The survey examined nine B2B spending categories and three additional categories of taxes; people/workforce; and travel, entertainment, and expenses for a look at the dynamics and impact of overall business spending, the researchers said.