Partner Article

Business investment down £400m at 2012 close

Business investment was estimated to have decreased by £400m in the final quarter of 2012, according to data from the Office for National Statistics.

Total non-manufacturing investment decreased by £300m to £27.6bn, compared to Q3 2012, although overall business investment actually increased by £100 year-on-year.

The estimate is an indicator of spending on assets such as buildings, vehicles and machinery, by businesses throughout the UK.

Emmanouil Schizas, Senior Economic Analyst at ACCA (Association of Chartered Certified Accountants) said: “Business investment has always been volatile and subject to significant revision, but this time around ONS has substantially changed the way it calculates seasonal adjustments, so we should expect the figures to alter again in future. On the other hand, it may be that a lot of investment decisions are being postponed by businesses.

“Based on our Global Economic Conditions Survey, we believe there is a significant amount of pent-up investment that has been postponed as businesses wait to see whether the triple-dip will turn into something worse, and whether it will prompt significant changes in economic policy. In that sense, the upcoming Budget could be crucial – it could release this money into the economy or send it back in search of safety.

“While business investment was flat year on year in Q4 there’s no disguising the overall trend in investment – which ran out of steam in early 2012. Importantly, ONS notes that oil and gas exploration appears to have been a significant contributor to the year on year figures as a result of tax relief introduced in 2012 – without this the year on year change would most likely have been negative.”

This was posted in Bdaily's Members' News section by Tom Keighley .