Modest Growth In OECD GDP

Private consumption was the main contributor to the modest growth of 0.2% in real GDP in the OECD countries in Q1 of 2014 compared with 0.5% in the previous quarter. Government consumption and investment also added slightly to GDP growth but net exports (-0.1%) and destocking (-0.2%) contributed negatively. Gross fixed capital formation added 0.1% points to real GDP growth.

The OECD G7 countries contributions in percentage points: Japan contributed real GDP growth of 1.6%, Germany and the UK contributed 0.8%, Canada 0.3%, France contributed flat economic growth, Italy made a negative contribution, -0.1% and the US contributed -0.7%.

2.4% Increase In Business Investment

The ONS recently released the latest figures on business investment in the UK. The release includes breakdowns of total gross fixed capital formation (GFCF), business investment being only one component. They show indicators of investment in assets such as dwellings, transport equipment, machinery, buildings and intangible assets. GFCF increased by £1.3bn, or 2.4%, to £56bn over the quarter, business investment was the largest component.

Business investment also increased by 2.4%, an estimated £0.8bn, compared with the last quarter. It is 8.5% higher than Q4 2012.

The data in this survey are concerned with net investment that is the value of capital expenditure minus the value received from disposals. Net investment was considered to have been relatively weak through 2012 and 2013 compared with other sectors of the economy because even though there was relatively strong growth in the acquisition of assets there was also the increasing disposal of assets which grew more strongly than acquisitions and still remains high.

The primary data source for the business investment statistics from the ONS is the Capex, or Quarterly Capital Expenditure Inquiry.