Mexican Companies to Increase B2B Spending the Next 12 MonthsBy Andrea Villar | Fri, 07/09/2021 - 17:01
As a result of the pandemic, businesses in Mexico have become more cautious when it comes to new business ventures but also in-house spending. During 2Q2021, companies in Mexico expect their B2B spending to be 1.1 percent higher compared to the same period last year, equating to an estimated recovery of US$1.87 billion for this category, revealed the Global Business Spending Scoreboard (GBSI) conducted by American Express in partnership with the Center for Economics and Business Research (CEBR).
Companies' spending on taxes and licenses, as well as on raw or processed materials like lumber, metals and chemicals, had the highest growth over all business spending categories, increasing by an average of 5.1 percent and 4.1 percent respectively in 1Q2021 compared to the same period last year. Spending on technology, which includes infrastructure, software and hardware, increased 7.7 percent between 4Q2020 and 1Q2021, reflecting an upward trend and “great relevance in this category for Mexican companies,” Jorge De Lara, Vice President and General Manager of Global Commercial Services for American Express Mexico and Latin America, said in a statement.
Despite investment in areas focused on business growth and operations, spending categories focused on pandemic control and prevention still hold a place in companies' wallets in Mexico. Chemicals are the fastest-growing spending items within the raw materials category, health care and medical within the people and labor category, and medical and health equipment within the capital expenditure category. “Mexican companies still have considerable focus and concerns about how the pandemic will unfold in the coming months,” the report notes.
Automation, Business Priority
Automation of operations and processes is also a top priority for businesses in the country. In Mexico, 70 percent of companies surveyed plan to start or further automate their purchasing or procurement processes within the next 12 months. Those planning to start or expand automation for receiving payments account for 74 percent and those looking towards supplier payment processing account for 73 percent. According to American Express research, with increased automation, companies in Mexico could reduce their reliance on predominantly physical payment methods, as 32.3 percent of Mexicans still use cash and paychecks.
Technology spending by companies in the country increased by an average of 2.4 percent between 1Q2020 and 1Q2021. This spending, the study shows, was not only used for automation but also to increase e-commerce capabilities or website improvements. In Mexico, 29 percent of companies list “increasing their online presence” among their top three goals for the next 12 months.