Annual global commercial spending grew to an estimated $77.3 trillion in 2007, an increase of 12.2 percent from $68.9 trillion in 2006, according to data from the Commercial Consumption Expenditure (CCE) index released today by Visa Inc. (NYSE: V). Commercial spending in the United States grew to an estimated $19.7 trillion in 2007, up 5.5 percent from the 2006 total of $18.7 trillion.
According to index estimates, spending in all global geographic areas rose during the year. Europe represented the largest share of commercial spending, followed by the United States, Asia/Pacific, Central and Eastern Europe/Middle East/Africa, Latin America/Caribbean and Canada. The CCE index is a financial metric that provides standardized tracking of business and government spending globally and is recognized as an industry benchmark for measuring commercial spending.
“The CCE index was developed by Visa to measure the penetration of commercial payment products and to help client financial institutions develop solutions tailored to meet the evolving payments needs of business and government,” said Darren Parslow, Head of Global Commercial Products, Visa Inc. “Along with Visa’s comprehensive suite of commercial payment products, the CCE index helps Visa commercial issuers to better serve organizations of all sizes in managing their commercial payments.”
CCE Around the Globe
Listed below is a breakdown of estimated 2007 commercial spending by global geographic area.
| Geographic Area | CCE Spend 2006 | CCE Spend 2007 (est.) | 2007 Global Share | 2006-2007 Growth | ||||||||
| Europe | $ | 23.4 | $ | 26.8 | 34.6 | % | 14.3 | % | ||||
| United States | $ | 18.7 | $ | 19.7 | 25.5 | % | 5.5 | % | ||||
| Asia Pacific | $ | 16.8 | $ | 18.9 | 24.5 | % | 13.0 | % | ||||
|
Central/Eastern Europe,
Middle East and Africa | $ | 4.3 | $ | 5.1 | 6.7 | % | 20.5 | % | ||||
| Latin America/Caribbean | $ | 3.7 | $ | 4.5 | 5.8 | % | 19.8 | % | ||||
| Canada | $ | 2.1 | $ | 2.3 | 3.0 | % | 11.9 | % | ||||
| Total Global CCE | $ | 68.9 | $ | 77.3 | 100.0 | % | 12.2 | % | ||||
in $USD Trillions | ||||||||||||
U.S. Spending by Business Segment
Listed below is the estimated U.S. commercial spending by business segment.
| Business Segment | CCE Spend 2006 | CCE Spend 2007 (est.) | 2007 Segment Share | 2006-2007 Growth | ||||||||
| Small Business | $ | 4.5 | $ | 4.7 | 23.8 | % | 5.1 | % | ||||
| Medium Business | $ | 3.6 | $ | 3.7 | 19.0 | % | 5.4 | % | ||||
| Large Business | $ | 9.4 | $ | 9.9 | 50.3 | % | 5.4 | % | ||||
| Government | $ | 1.3 | $ | 1.4 | 6.9 | % | 7.2 | % | ||||
| Total U.S. CCE | $ | 18.7 | $ | 19.7 | 100.0 | % | 5.5 | % | ||||
in $USD Trillions | ||||||||||||
U.S. Category Spending
U.S. spending is concentrated in the top five categories which account for an estimated 66 percent of 2007 U.S. commercial spending.
| Spend Category | CCE Spend 2007 (est.) | Small Business | Medium Business | Large Business | Government | ||||||||||
| Raw Materials & Manufactured Goods | $ | 7.7 | 20 | % | 19 | % | 56 | % | 5 | % | |||||
| Capital Equipment | $ | 1.7 | 23 | % | 21 | % | 52 | % | 4 | % | |||||
| Rent | $ | 1.5 | 36 | % | 21 | % | 38 | % | 4 | % | |||||
| Telecommunications Services | $ | 1.1 | 25 | % | 16 | % | 55 | % | 5 | % | |||||
| Gasoline | $ | 1.0 | 21 | % | 21 | % | 52 | % | 6 | % | |||||
| Total U.S. Top 5 Spend Categories | $ | 13.0 | |||||||||||||
in $USD Trillions | |||||||||||||||
CCE Methodology
The CCE index captures business to business purchases to acquire goods and services used in production, wholesale and retail purchases of final goods, business capital expenditures and government spending on goods and services. Adjustments are made to exclude capitalized expenditures such as construction and durable defense spending. Calculations measure transactions at basic prices which include taxes on production. Retroactive adjustments are made as necessary to include revisions in officially published statistics and economic data for current and prior years.
Data sources used to calculate the U.S. CCE index include the Bureau of Economic Analysis (BEA) and U.S. Census Bureau which conducts the Retail and Wholesale Trade Surveys. A variety of data sources were used in the calculation of the Global CCE index including the Organization for Economic Co-operation and Development (OECD), the STructural ANalysis (STAN) Database, the General Government Accounts from the National Accounts of OECD Countries, the United Nations Statistics Division National Accounts Main Aggregates Database, Economist Intelligence Unit proprietary databases and government data from several countries. A model developed by the Economist Intelligence Unit was used to estimate results for countries where government data was unavailable.
This year, the U.S. CCE index was modified to include retail and wholesale intermediate inputs which brings it into alignment with the Global CCE index. Also, the U.S. segmentation methodology was revised to improve consistency across all business segments. Results for current and prior years include these adjustments.
About Visa Inc.: Visa Inc. operates the world’s largest retail electronic payments network providing processing services and payment product platforms. This includes consumer credit, debit, prepaid and commercial payments, which are offered under the Visa, Visa Electron, Interlink and PLUS brands. Visa enjoys unsurpassed acceptance around the world and Visa/PLUS is one of the world’s largest global ATM networks, offering cash access in local currency in more than 170 countries. For more information, visit www.corporate.visa.com.
Contacts:
Sabine Middlemass, 650-432-8307
globalmedia@visa.com
or
Fleishman-Hillard
Erin
Couch, 415-318-4207
erin.couch@fleishman.com
