Afternoon Coffee: February PMI registers 9th consecutive month of growth; COVID-19 testing demand plummets; GTreasury acquires Coprocess

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Economic activity in the manufacturing sector continued to grow in February, according to the latest Manufacturing ISM Report on Business numbers released yesterday.

The February PMI number registered 60.8%, indicating an expansion in the overall US economy for nine consecutive months, according to the Institute for Supply Management. February’s reading was up 2.1 percentage points from the January reading of 58.7%. The economy has continued to grow after a contraction in March, April and May because of the Covid pandemic.

“The manufacturing economy continued its recovery in February,” Timothy R. Fiore, Chair of the ISM Business Survey Committee, said in a press release. “Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories. Issues with absenteeism, short-term shutdowns to sanitize facilities, and difficulties in hiring workers remain challenges and continue to cause strains that limit manufacturing-growth potential.”

COVID-19 testing demand plummets in recent weeks as vaccine rollout ramps up

After a year of ramping up COVID-19 testing, communities across the United Sates are seeing plummeting demand, while testing sites shut down and supplies are returned, according to the Associated Press.

The drop in screening is coming at a time when coronavirus cases are falling, and the focus is shifting to the vaccine effort. But experts are concerned about emerging variants of the virus. US testing hit a peak on Jan. 15 when the country averaged more than 2 million tests per day. Since then, the number of daily tests has fallen more than 28%, the AP reported.

“You have to pick your battles here,” Dr. Jeffery Engel at the Council of State and Territorial Epidemiologists told the Associated Press. “Everyone would agree that if you have one public health nurse, you’re going to use that person for vaccination, not testing.”

GTreasury acquires Coprocess to focus on intercompany netting solutions

GTreasury, a treasury and risk management platform, announced the acquisition of Coprocess, an intercompany netting solution provider.

Intercompany netting is a deal where subsidiaries of a corporate group exchange payments from a clearing house or netting center for any obligations. It's used to reduce credit and settlement risk.

In a press release announcing the deal, GTreasury said it hopes that by adding intercompany netting to its platform, corporate treasurers will have the ability to significantly streamline their settlement processes, cut costs by reducing payments and foreign exchange (FX) volumes, and add automated capabilities to treasury workflows.

Treasurers using Coprocess have seen payments and FX volumes lowered by as much as 70%. It also provides more centralized banking relationships and reduced complexity.

"It will be interesting to see if GTreasury and Coupa (with its BELLIN acquisition) can make inter- and intra-company netting new best practices for corporates,” Jason Busch, Founder of Spend Matters, said of the acquisition. “There is no reason this approach to payments should not become more prevalent in the coming years with larger technology leaders in treasury and finance technology educating their customers about it — and offering off-the-shelf technology capability."

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