Member Article

Business investment declines over final quarter of 2011

Business investment fell across the final quarter of 2011 by £1bn compared with the previous quarter, according to figures from the Office for National Statistics.

Investment estimates are a short term indicator of capital expenditure by manufacturing and non-manufacturing businesses in the UK.

Total manufacturing investment was shown to have fallen by £0.1bn to £3.6bn when compared with the previous quarter, while non-manufacturing investment decreased by £0.9bn to £26.2bn.

Over the last 18 months, business investment growth has been positive, having contracted sharply through the recession.

Business investment declined by just over 21% between 2007 and 2009, and in 2011 investment had recovered by 11%.

John Dance, branch principal & investment manager at Vertem Asset Management, said: “Although business investment declined in Q4, it was still slightly higher than expected, despite a disappointing downward revision in the UK’s Q4 GDP figure.

“Given the economic uncertainties and fears of another banking crisis that overshadowed industry in Q4, it should be no surprise that businesses were wary of investing during the period. Hence we expect a stronger Q1 than might ordinarily have been expected otherwise.”

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