Spend on travel, SaaS and client entertainment all on the rise
25 August 2020, London, UK – European businesses increased their spending by 29 percent in July, compared to June, 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.
An 2020 forecast released by The City of London economists earlier this week suggests that UK GDP will rise by 14.3 percent in the third quarter of the year. According to the latest data from the Soldo Spend Index, the early signs of spend recovery seen in June continued through July, as total business spending in the UK and Ireland increased by 28.5 percent over the previous month. Spend across the rest of Europe saw an increase of 29.9 percent between June and July.
According to the Spend Index, total business spend in the UK and Ireland increased by 50.5 percent year on year in July, perhaps reflective of the release of a spending bottleneck that built up during lockdown. In the rest of Europe, it increased by 7.2 percent.
The reopening of restaurants and much of the hospitality sector from the 4th of July has likely fuelled an increase in business spending on client entertainment, which was up a massive 2646.2 percent in July against the previous month. Despite the huge monthly increase, business spending on client entertainment is still down by 71.7 percent against July 2019.
Business spending on services in July 2020 – including professional services, subscriptions, and software – increased by 69.9 percent on July 2019, as companies continue to embrace digital. Services and software have accounted for 24.5 percent of all purchases made using Soldo in 2020 so far.
Business travel spend, which includes travel arrangement services, such as hotel or flight bookings, tells a similar story to spend on client entertainment. It is up by 95.8 percent in July compared to June, yet it is still down by 20.7 percent vs July 2019. Business transport spend, which includes money spent on taxis, motor freight carriers, local delivery services has also decreased by 27.2 percent in the same period. The data is also showing signs of recovery, as transport spend increased by 29.4 percent from June to July and as normal behaviour gradually resumes.
Carlo Gualandri, Founder and CEO at Soldo says: “As lockdown restrictions eased, we saw a significant increase in business spending, signalling a cautious return of business activity. These trends are reflected across Irish and UK businesses, who increased their spending at a similar rate as their European counterparts in July. This suggests a first step in a return to confidence for businesses as economies reopened.
“We must temper this positivity with a degree of caution, however. There will be tough times ahead for businesses across Europe as recessions set in, and they will need to keep a close eye on their outgoings to come out of the other side unscathed.”
The spending bounce back can be seen across other sectors too. Business shopping spend, which includes stationery, tools, and relevant equipment, grew by 43.9 percent from June to July 2020. And spending on food increased by 35.4 percent over the same period.