Business investment fell by 3.3% or £1bn to £29.7bn on the previous quarter but increased by £0.5bn on the same quarter last year. Total manufacturing expenditure decreased by £0.1bn while total non-manufacturing decreased by £0.9bn when compared with the previous quarter.
Business investment growth has been positive for most of the last eighteen months after the severe falls during the recession but it has again contracted in Q4 2011. The reasons are not the same. Whereas during the recession and the related falls in output business investment was weak, this recent weakness seems due to a cautious stance by the corporate sector towards expansion and investment. It can be seen in the limited increases in employment. The ratio of business investment to private non-financial corporation gross trading profits has come down to fewer than 50% from over 60%. Current price data is subject to movements.
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