SAN MATEO, Calif., Sept. 2, 2021 /PRNewswire/ -- Business spend data
showed continued improvement in Q3 2021, increasing nearly 3
percent from last quarter, representing continued confidence in the
economic outlook according to data gleaned from the Coupa platform
which is used by more than 2,000 companies.
The insights published today by Coupa Software (NASDAQ:
COUP) in its quarterly Business Spend Index (BSI), Q3 2021
Outlook, leverage billions of dollars of aggregated and
anonymized data on search, order, and pay activities to provide a
predictive measure of confidence in future economic opportunity as
defined by the willingness of businesses to commit to spend.
The entire Coupa BSI Q3 2021 Outlook can be accessed here.
BSI Q3 2021 Insights in Key Industries:
- Manufacturing: Increased for the
first time in three quarters, though this may put additional
pressure on stressed supply chains as well as prices.
- Retail: Increased strongly,
indicating business confidence in the sector is rebounding. Recent
evidence suggests consumers are returning to brick-and-mortar
locations.
- Health and Life Sciences: Increased, modestly,
and will likely perform near trend for the next one to two quarters
though COVID variants could challenge the sector's growth.
- Business Services: Declined after three
consecutive quarters of growth. We expect sector performance to
continue to decelerate based on overall deceleration in the
BSI.
- Financial Services: Unchanged, the sector has
remained stable throughout the pandemic. Income support will likely
continue to prop up consumer demand in the near term.
- High Tech: Unchanged, however global chip
shortages could disrupt activity in the sector and reduce growth
into 2023.
"Despite persistent supply chain disruptions, spiking COVID
cases, and delayed return to work plans, spend per customer is up
20 percent year-over-year indicating business confidence is
returning to pre-pandemic levels," said Jeff Collins, chief economist at Coupa. "The
increases within Manufacturing and Retail are indicative of
continued upward demand from consumers and businesses as the
economy returns to normal."
BSI Supplemental Insights:
- Category Insights as measured by average spend per
customer quarter-over-quarter show:
-
- Travel and Entertainment increased 106.8 percent
and COVID Commodities decreased 31.0 percent,
indicating many companies have adjusted to existing COVID risk, and
are beginning to redefine "normal" operations.
- The 29.6 percent increase in Contingent Workforce
indicates that businesses are ramping up, thus needing more support
as they return to normal levels of operation.
- Shipping and Freight decreased 25.2 percent.
Price and volume could be leading to this decline. Previous
quarters saw substantial growth and supply chain bottlenecks that
caused significant price increases, but supply chain disruptions
are starting to abate.
- Flow of Goods: Orders per supplier from China to the U.S. declined 8 percent, a
significant reduction from pre-pandemic levels. After continued
supply chain disruptions, companies are potentially looking to
diversify their global supply base to protect against continued
risk.
- Supplier-to-Buyer Ratio: On average, companies
doubled the number of suppliers they are using in 2021, as
compared to pre-pandemic levels. This likely comes as companies
make strategic shifts in how they operate to ensure long-term
resilience.
"Looking at category-level spend provides insights into the
speed with which business activity is returning to normal," said
Dr. Collins. "The rise in Travel and Entertainment last quarter
is an early signal that companies are becoming more comfortable
returning to pre-pandemic levels of engagement, at least
internally."
The Coupa BSI Methodology
The Coupa BSI is a
predictive measure of business confidence, produced by combining
the power of data on business spending within the Coupa Community
with the intelligence of statistical models, and from which we
derive 13 factors representative of business spend decisions
grouped into three categories to provide clarity and preserve
anonymity:
- Search: This set of inputs measure early-stage activity
in the Business Spend Management (BSM) process. Search includes,
for example, a measure of Sourcing activity indicative of improving
or declining confidence in future economic opportunities.
- Order: A set of inputs that measure Purchase Order
creation, which represents the commitment to spend. Order includes
both spend and transactional volumes and is positively related to
increased confidence in the economy.
- Pay: A set of inputs that measures Invoice and Expense
volume. Pay comprises transaction volumes related to spend which
has been incurred. This includes business travel spend which is
highly sensitive to changes in business confidence.
We use our proprietary algorithm for variable selection from
Coupa's Demand Modeler to choose the optimal group of variables to
best predict economic activity. The Coupa BSI is normalized to a
baseline value of 100, which represents the state of business spend
in the baseline reference period (January
2018) computed using the dynamic factor model with the three
grouped factors.
Disclaimer: The findings of the BSI are not necessarily
indicative of trends happening with Coupa's business.
About Coupa Software
Coupa empowers companies around
the world with the visibility and control they need to spend
smarter and safer. To learn more about how Coupa can help you spend
smarter, visit www.coupa.com. Read more on the Coupa Blog or
follow @Coupa on Twitter.
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SOURCE Coupa Software