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Industry roundup: 26 July

Citi launches real-time liquidity sharing in Asia

Citi has announced the launch and roll out of a new global Real-Time Liquidity Sharing solution, addressing a pressing need for companies to secure improved efficiencies in liquidity and working capital. Part of Citi’s Liquidity Optimization product suite, the platform is launching across six countries and jurisdictions in Asia Pacific - Australia, China, Hong Kong, New Zealand, Singapore and Taiwan - and the bank says that other regions and additional markets to follow in line with client demand.

The need for improved efficiencies has been heightened by pandemic-driven remote working, rapid changes to business models and ensuing stress on liquidity. Developed in response to client demand for advanced liquidity management technology, Citi’s latest innovation enables treasurers to manage intraday liquidity in real-time. With Citi Real-Time Liquidity Sharing, treasury teams can mobilise liquidity and fund intraday payments across multiple accounts and entities in real-time, without having to bother with physical funding of the accounts. This allows companies to maximise their working capital and eliminates the need for manual funding and forecasting, thereby saving hours of work and reducing the administrative costs associated with external and subsidiary borrowing.

"With the launch of Citi Real-Time Liquidity Sharing, clients can benefit from real-time funding solutions even in situations where their cash flow forecasting may not go as planned," said Sandip Patil, Asia Pacific head of Liquidity Management Services, Treasury and Trade Solutions at Citi. "Beyond treasury automation, our new solution further complements how we are helping clients realise true e-commerce and real-time growth potential, by bringing embedded instant payments and liquidity solutions on a 24x7 basis."

"The rapid development of this latest addition to our Liquidity Optimization product suite is testament to our focus on investing in digital innovations that will support clients evolving needs in a post-pandemic world," added Stephen Randall, global head of Liquidity Management Services, Treasury and Trade Solutions at Citi. "During a time of unexpected change and with the rapid acceleration of new technology adoption, we are proud to serve as a trusted advisor and partner to our clients and their treasury needs."

 

Spending hits highest in history of U.S. Bank Freight Payment Index

Truck freight spending in the US increased at record levels in the second quarter of 2021, according to the Q2 2021 U.S. Bank Freight Payment Index. Spending jumped 10.1% over the first quarter levels, bringing the total measure to the highest recording in the history of the index. A quarterly analysis of national shipments and spending launched in 2017, the index utilises data going back to 2010. 

While still below pre-pandemic levels, the number of truck freight shipments also increased significantly in the second quarter, up 4.4% from the first quarter. The improvements in shipments are a result of strong truck freight demand as key economic activity, like construction and retail, continued to rebound in the first half of the year.  

"We are seeing a continued rise in demand for freight shipments and this is expected to only increase as the economy continues to recover and retailers work to replenish their inventories," said Bobby Holland, U.S. Bank vice president and director of Freight Data Solutions. "At the same time, the industry is facing one of the largest supply crunches in history, driven in large part by a major truck driver shortage. This shortage, along with rising fuel prices, is causing considerable spending increases for shippers."

In addition to the 10.1% increase during the second quarter, the U.S. Bank National Spend Index rose 44% year-over-year. Additionally, each of the five regions saw double-digit growth in spend, including two (Southeast and West) which exceeded 50% increases versus last year. 

Meanwhile, in addition to the 4.4% increase in shipments during the second quarter, the U.S. Bank National Shipments Index rose 6.8% year-over-year. The shipments index remains below peak pre-pandemic levels. Three of the five regions (Southeast, Southwest and West) saw growth in shipments versus 2020, while the remaining two (Northeast and Midwest) contracted just slightly.  

 

UK small business growth achieves record high in June

NatWest’s UK Small Business Recovery PMI shows that the UK’s businesses recorded a fourth straight monthly increase in output during June, with looser pandemic restrictions leading to a surge in customer demand. On average in the second quarter of 2021, the rate of business activity expansion was the fastest since the index began more than 23 years ago.

At 59.8 in June, the headline All-Sector Small Business Activity Index eased only slightly from May's all-time high of 61.3 and remained well above the crucial 50.0 no-change value. Across the quarter as a whole, the index averaged 59.9, up from 47.7 in Q1 and the highest since the series began in 1998.

The NatWest UK Small Business Recovery PMI survey is compiled by IHS Markit and monitors the performance of businesses with between 1 and 49 employees. Higher levels of business activity reflected a renewed upturn among small service providers, as well as faster rates of expansion in manufacturing and construction. Small construction firms led the latest upturn in business activity (64.8 in June), helped by rapid increases in residential work and a boost from new commercial projects as the UK economy reopened.  

Service providers benefited from pent up business and consumer demand in June, with output growth the second-fastest since July 2013 (60.0). Small manufacturers also registered a strong recovery, but supply disruption led to a slowdown in production growth to its weakest since February (55.9).  

June saw a near record rise in new work at small UK firms, with all the three sectors posting sharp increases in sales volumes. Greater workloads continued to place pressure on business capacity. Backlogs of work were accumulated at the steepest pace since this index was first compiled in January 1998. Survey respondents commented on staff shortages and severe delays with deliveries of raw materials. Small firms in the manufacturing sector signalled the worst month for supplier performance since this index began in January 1998.   

Efforts to alleviate the strain on capacity resulted in strong job creation during June. Employment growth was only slightly slower than May's record high, with construction companies posting the fastest rise. Supply shortages, amplified by rising wages and transport costs, led to intense price pressures in June. Small businesses signalled that both input cost and prices charged inflation hit a survey-record high in June. Concerns about cost inflation and constrained capacity contributed to a fall in business optimism to its lowest since February. Although still at an historically high level, small business confidence was also lower than seen in the rest of the UK private sector. 

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