Businesses loosen purse strings
May 21 2010
SMEs are dusting off their wallets
In a show of confidence in the economic recovery, companies increased investment in their enterprises in the first quarter of this year.
The first three months of 2010 saw business investment increase by 6 per cent to £29 million, compared to the previous quarter. But there is a limit to the optimism, with investment still 11 per cent lower than in the first quarter of 2009, according to official figures.
David Kern, chief economist at the British Chambers of Commerce, says: ‘Importantly, business investment has risen in the first quarter of 2010 after long declines. But, it is still lower than a year ago, and action must be taken to ensure further increases throughout this year and beyond.
‘Unless business continues to grow, UK productivity will suffer and the economy will lack the capacity to meet growing demand as the recovery gathers momentum.’
According to previously released figures, business investment was 24.1 per cent lower at the end of 2009 than at the start, the worst annual decline since records began in 1967.
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