The Coupa Business Spend Index:
Q4 Forecast: Rising Risk of Recession Approaching 2023
All Industries
Vs Last Quarter (Q2 2022: -1.9%)
Vs Last Year (Q3 2021: 16.2%)
Forecast Range: BSI Forecast
Coupa’s Business Spend Index (BSI) is powered by billions of dollars of spend transactions that are grouped into three categories: Search, Order, and Pay. The BSI provides insights into business, industry, and economic trends based on business spend behavior.
The latest BSI decreased nearly 1.9% over the prior quarter, indicating flat to slightly negative growth over the next 3 to 6 months.
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Vs Last Quarter (Q2 2022: -1.5%)
Vs Last Year (Q3 2021: -1.8%)
Financial Services
Vs Last Quarter (Q2 2022: -0.4%)
Vs Last Year (Q3 2021: 2.5%)
Health and Life Sciences
Vs Last Quarter (Q2 2022: -3.1%)
Vs Last Year (Q3 2021: 7.0%)
High Tech
Vs Last Quarter (Q2 2022: -3.5%)
Vs Last Year (Q3 2021: 22.5%)
Manufacturing
Vs Last Quarter (Q2 2022: -0.9%)
Vs Last Year (Q3 2021: 2.9%)
Other Services
Vs Last Quarter (Q2 2022: 0.1%)
Vs Last Year (Q3 2021: 22.7%)
Retail
Vs Last Quarter (Q2 2022: -4.4%)
Vs Last Year (Q3 2021: 2.0%)
"With the Fed’s commitment to rein in inflation, including multiple recent increases to the Fed Funds rate, slow growth through the first half of 2023 is almost guaranteed. While overall growth will be slow, the impact across industries will be varied. For example, according to our BSI sector data financial services normally benefit from higher rates while high-growth tech companies tend to be adversely impacted. Based on the Q3 BSI data we expect to see flat to slightly negative overall growth over the next three to six months.”
Jeff Collins, Ph.D., Chief Economist, Coupa
What is the Coupa Business Spend Index?
The Coupa Business Spend Index (BSI) is a predictive measure of business confidence that delivers community-driven insights enabling companies to take action and make informed spend decisions that lead to realized, measurable business value.
The power of the Coupa BSI derives from the billions of dollars in spend flowing annually through our platform. Coupa is and always has been a pure cloud solution for Business Spend Management, and because of that, we are uniquely able to leverage over $2T of aggregated and anonymized business spend data. Using this data, we derived a number of spend factors which are grouped into three categories Search, Order, and Pay. This data provides an unparalleled look into past spend as well as current intended spend of companies around the globe, which in turn provides insight into the larger industry and economic trends.
The Coupa BSI provides business decision makers with critical information to plan for changes in their business's spend. By leveraging Coupa’s Community, business decision makers can benefit from the information, support, and credibility needed to drive even improved results - since none of us is as smart as all of us.
What are the spend factors within the BSI?
Search
This set of inputs measure early-stage activity in the Business Spend Management process. Search includes, for example, a measure of Sourcing activity that is 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.
FAQs
The Coupa Business Spend Index (BSI) is a predictive measure of business confidence that delivers community-driven insights enabling companies to take action and make informed spend decisions that lead to realized, measurable business value. It provides community-driven insights on how companies are searching, ordering, and paying across their organizations.
Our unique visibility into the end-to-end process of business spend allows us to provide immense value for business leaders. With the BSI, CFO's, and business decision makers can get a forward view of the direction and velocity of the U.S. economy at the macro and industry level to make strategic decisions that deliver value back into their business strategy.
The Coupa Business Spend Index (BSI) is a predictive measure of business confidence that delivers community-driven insights enabling companies to take action and make informed spend decisions that lead to realized, measurable business value. It provides community-driven insights on how companies are searching, ordering, and paying across their organizations.
We are very confident in our ability to provide an accurate and insightful forecast of future economic activity. This is due to the wide range of customers and the amount of spend flowing through the Coupa platform, which provides a large and representative data set used to inform the BSI. On top of that rich data, we have built a model based on substantial academic research.
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 spend factors.
