Businesses were hit hard the world over in 2020, and small businesses seemed to bear the brunt. However, Dext research shows that small businesses were remarkably resilient in the face of the COVID-19 pandemic. Now, some eighteen months after the pandemic began, business spending in the UK, Australia, US, Canada and France is up, and, in many categories, now sits comfortably above pre-pandemic levels.
In the UK, US, Canada, France and Australia, businesses suffered from the economic consequences of lockdown measures, with business spending on a range of expenses plummeting. In Canada, for example, business spending on travel fell by a staggering 100% as previously mobile teams found themselves grounded. Despite this, businesses were quick to get back on their feet, with spending on software and technology in particular driving recovery.
Over the last year, businesses have digitised much faster. Spending on remote working software, by necessity, sky-rocketed, allowing Microsoft to consolidate its already considerable grip on the market. In Australia, overall business spend on Microsoft is now five times higher than it was in 2018, and the tech giant has overtaken the country’s previous leader Zoom by a vast margin.
As businesses digitised, so did their advertising. In the UK, businesses spent 2.5 times more on Google and Facebook digital advertising in 2021 than they did in 2018. In Australia, overall spend on Google advertising quadrupled in the same period, and data taken from businesses in the US and Canada show similar results. As businesses – and their customers – moved increasingly into a digital space, so too did their advertising. In all the countries examined in this research, digital advertising spending peaked sharply in 2020. Since then, spend growth has slowed and even decreased. Nonetheless, overall spend remains significantly higher than pre-pandemic levels.
Increased spending on areas such as software and technology indicates that businesses are feeling a renewed sense of confidence when it comes to allocating capital. What’s more, spending on digital advertising shows that businesses are continuing to invest in scaling their operations and customer bases. The increased overall spending signals a return to relative economic normality and increased levels of business activity.
With businesses now investing more in technology and remote working, and moving more advertising into the digital space, they are also better positioned to withstand future challenges and restrictions.
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