Business investment drops
Feb 25 2009
Figures from the Office for National Statistics (ONS) show business investment fell in the last quarter of 2008.
The data reveals that in the final three months of the year spending dropped by 3.7 per cent, from £34,979 million in the third quarter to £33,630 million.
When compared to the same period in 2007, business investment fell from £36,420 million, representing a 7.7 per cent decline.
In addition, the manufacturing sector experienced the greatest drop in expenditure, with a 11 per cent reduction on the previous quarter and a 15.7 per cent fall on 2007, taking the value to £3,269 million.
Commenting on the figures, the British Chambers of Commerce suggests that the decrease is due to a lack of confidence which hit the economy in 2008 and the ongoing crisis in the banking sector.
Steve Hughes, economic adviser to the organisation, says: 'Firms will only be willing to invest when some semblance of normality returns to the provision of credit and demand picks up within the economy as a whole.'
The expert also claims the government has the opportunity to deal with these concerns in the upcoming Budget Report in April.
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