Data shows year-on-year spending on software, food and shopping is significantly up but transport, travel and entertainment still lagging behind
25 July 2020, London, UK – European businesses increased their spending by 33 percent in June, compared to the previous month, according to the Soldo Spend Index. The resource, compiled by spend management platform Soldo, features data from a sample of over 28,000 businesses across Europe.
The Office for National Statistics (ONS) announced mid-July that UK GDP grew by 1.8% in May 2020. Although this is less than the 5 percent that was expected, the return to economic growth is reflected in business spending habits. According to the Soldo Spend Index, business spend in the UK and Ireland increased by 44.6 percent year on year in June. In the rest of Europe, it increased by 0.46 percent.
The signs of fledgling recovery that were seen in May continued in June as UK business spending increased by 25.6 percent over the previous month. This corresponds to the government’s further easing of lockdown restrictions, including the re-opening of non-essential shops the 15th of June. Spend across the rest of Europe saw an increase, of 37.9 percent between May and June.
From January to June 2020, business spending on services – including professional services, subscriptions, and software – increased by 124.9 percent on the previous year, as companies sped up their shift to digital. Services and software have accounted for 25.4 percent of all purchases made using Soldo in 2020 so far, and 27.6 percent of all purchases since lockdowns began around Europe in March.
At the other end of the spectrum however, business spending on client entertainment from January to June 2020 has decreased by 36.3 percent on the previous year. Entertainment spend has continued to decrease despite lockdown restrictions easing and sits at -58.9 percent in June 2020 against the previous month as businesses continue to work from home and much of the hospitality sector remained shut until the 4th of July.
Business travel spend, which includes travel arrangement services, such as hotel or flight bookings, is down by 52.3 percent year-on-year. Business transport spend, which includes money spent on taxis, motor freight carriers, local delivery services has also decreased by 32.5 percent in the same period. The data does show signs of recovery, however. Travel spend increased by 178.9 percent from May to June and transport spend increased by 42.6 percent, as normal behaviour gradually resumes.
Carlo Gualandri, Founder and CEO at Soldo says: “The data shows that as restrictions begin to lift across Europe, businesses are regaining the confidence to spend. Throughout this pandemic, cashflow and cost-control will continue to be of vital importance to business survival, yet it is very encouraging for the wider economy that spend is continuing to grow. It’s all about balance – you need to watch costs very closely while still spending in order to survive – and for this, real-time data is essential for full visibility into the financial health of your business.”
The spending bounce back can be seen across other sectors too. Business shopping spend, which includes stationery, tools, and relevant equipment, grew by 13.4 percent from May to June 2020. And spending on food increased by 65 percent over the same period.