Concerning spending and the economic outlook for businesses, cautious is the clear sentiment. The Q2 2020 Coupa Business Spend Index shows that, except for Health & Sciences, business spend sentiment dropped well below the trend line across all industry sectors. According to the press release:
In the Q2 Report, RFIs (the number of new requests going out to suppliers to procure goods and services) increased by 60 percent and average time to approve spend decisions decreased by 38 percent. In prior quarters, the inverse relationship between these two factors indicated confidence in the economy. However, while the data in the current quarter followed a similar pattern as prior quarters, the interpretation is different. The increase in RFIs this quarter indicates that businesses are scrambling to find suppliers to fulfill their orders, and once goods are located, businesses are acting quickly to approve spend to purchase those items. This combination, as opposed to prior quarters, shows there is instability and uncertainty for businesses, leading to a murky outlook regarding near-term economic growth.
Coupa Software, a provider of business spend management solutions, launched the Coupa Business Spend Index (BSI) in April 2019. The Index is a leading indicator of economic growth based on current business spending decisions of hundreds of businesses.