U.S. Commercial Spending Jumped to $17.3 Trillion in 2006
SAN FRANCISCO - Annual commercial spending in the U.S. grew to $17.28 trillion in 2006, according to new data released from Visa’s Commercial Consumption Expenditure index, representing an increase of 6.7 percent over 2005.
According to the index, spending among all key business segments rose during the year, with the strongest growth in spending occurring at midsize and large companies.
“The CCE index is a unique resource that enables Visa and its member financial institutions to more closely monitor current business-to-business spending trends and tailor payment solutions that meet the individual needs of each business segment,” said Darren Parslow, senior vice president, Visa Commercial Solutions. “With robust commercial spending anticipated through 2010, there is an opportunity to help businesses of all sizes manage their commercial payments more efficiently.”
A breakdown of spending by each business segment in 2006, including percentage increases over 2005 spending, is as follows:
Small business: $4.88 trillion, up 4.3 percent
Midsize companies: $3.50 trillion, up 8.0 percent
Large companies: $7.64 trillion, up 7.8 percent
Government agencies: $1.26 trillion, up 5.9 percent
The CCE index defines small businesses as those with $25 million or less in annual revenues, midsize companies are defined as having $25 million to $500 million in annual revenues, and large companies are defined as those with annual revenues of more than $500 million.
Based on the government data sources and methodology that make up CCE, the index projects that overall commercial spending will rise by 3.9 percent this year to approximately $17.95 trillion. Small business spending is expected to total $5.09 trillion in 2007, up 4.3 percent from 2006.
The index also projects continued growth in business-to-business spending through 2010, when it is expected to eclipse $20 trillion, including $5.7 trillion in small business spending.
“We continue to be optimistic about the future of commercial spending in the U.S.,” said Wayne Best, senior vice president, Business and Economic Analysis, Visa USA. “The Visa CCE index shows that commercial spending grew steadily in 2006 across all business sectors and indicates that business-to-business spending in the U.S. should continue to grow this year and through the end of the decade.”
On a global basis, the $17.3 trillion in U.S. commercial spending in 2006 represents 26 percent of the $66.7 trillion in total commercial spending worldwide. After a more detailed analysis of the 2006 CCE data, Visa expects to release in the coming weeks additional details on U.S. commercial spending by business industry sector expenditure type.
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