Business Investment y/y: -0.5%, forecast -2.2%, pr. 1.2% (2Q), 4.5% (1Q),
3.7% (4Q)

Figures on business investment surprised forecasts on the upside, decreasing only 0.2%, when expectations had investment dropping by 1.8%. Still, its the 3rd quarter that businesses have scaled back investment in the face of sharply weakening demand, rising levels of spare capacity, worsening cash flows and very tight credit conditions, deteriorating profitability, and serious concerns and uncertainties about the potential length and depth of the recession.

Business Investment y/y: 1.2%, forecast 1.9%, prelim. 1.9%, pr. 4.5% (1Q), 3.7%

From the Release: "Business investment for the second quarter of 2008 is estimated to be 1.2 per cent higher than the same period of last year and 1.0 per cent lower than the previous quarter. This compares with the respective provisional estimates of 1.9 per cent and -1.9 per cent previously published.

The quarterly fall in business investment is due to reduced capital spending by industries classified within private and public sector non-manufacturing (down 0.6 per cent) and by manufacturing industries (down 4.5 per cent).

The reduced investment in private and public non-manufacturing of 0.6 per cent was driven by industries within other services (down 3.0 per cent), construction (down 12.6 per cent) and public corporations (down 8.8 per cent). This is partly offset by increases within other production (up 13.6 per cent) and distribution services (up 5.7 per cent)."

Business Investment y/y: 1.9%, forecast 3.1%, pr. 4.5% (1Q), 3.7%

Business investment fell 1.9% in the 2nd quarter compared with the first, sharper than the 0.7% fall expected by economists. With businesses facing some of the stiffer costs of raw material costs and higher energy, they are scaling back their spending on heavy equipment and other investment. Sales are expected to cool as the economy is in the midst of a serious correction. The worse than expected result here will most likely have an impact on the GDP for the 2nd quarter which will most likely have to be revised down from its initial estimate.  

Business Investment y/y: 4.5%, forecast 3.7%, pr. 3.7%

From the Release: "Business investment for the first quarter of 2008 was 1.8 per cent lower than the previous quarter and is estimated to be 4.5 per cent higher than the same period of last year.

The quarterly fall in business investment is due to reduced capital spending by industries classified within private sector and public corporations non-manufacturing. Total manufacturing investment for the first quarter of 2008 fell by 6.7 per cent over the previous quarter. This fall was entirely within private sector manufacturing investment (down 6.8 per cent) with a slight offsetting increase from public corporations."

Preliminary Version for 1st Quarter.
Provided by: Office for National Statistics

Business Investment y/y: 3.7%, forecast 5.5%, pr. 5.3%

Spending by businesses in the UK for investment took a pretty steep hit in the 1st quarter. Compared to the 4th quarter, investment was down 1.4%, and the annual pace cooled to 3.7%. Both figures were far below forecasts.

From the Release: " Business investment for the first quarter of 2008 was 1.4 per cent lower than the previous quarter and is estimated to be 3.7 per cent higher than the same period of last year. The quarterly fall in business investment of 1.4 per cent is largely due to decreased capital spending by industries classified as private sector non-manufacturing distribution (down 8.3 per cent) and by private sector manufacturing (down 5.0 per cent).

The private sector manufacturing fall of 5.0 per cent was a result of a reduction in capital expenditure by metals and metal goods industries (down 20.8 per cent), chemicals and man made fibres (down 5.1 per cent), food drink and tobacco (down 16.8 per cent) and textiles, clothing, leather and footwear (down 20.7 per cent). There were no significant offsetting increases in this category."

Revised Version for 4th Quarter.
Provided by: Office for National Statistics

Business Investment y/y: 5.3% (rev. from 1.7% estimate) 

Business Investment rose 1.8% in the 4th quarter of 2007, a sharp revision for the previously given estimate of -0.5%. This release may have an effect on GDP values we will see from the UK on Friday. The better than expected spending on business investment may imply that the UK economy may face only a modest slowdown as a result of higher prices for credit. The bank of England will be ready to cut rates in order to stimulate growth. Manufacturing investment rose by 3.2% from the 3rd quarter, while service providers increased spending by 2.1%. 

From the Release:

"Business investment for the fourth quarter of 2007 is estimated to be 5.3 per cent higher than the same period of last year, and 1.8 per cent higher than the previous quarter.

The quarterly rise in business investment is largely due to increased capital spending by industries classified as private sector non-manufacturing. Within this, there was increased investment within distribution (up 5.2 per cent), and other services (up 1.6 per cent) but reduced investment within construction (down 4.2 per cent) and other production (down 1.7 per cent."

Provisional estimate for 4th Quarter.
Office for National Statistics 

"Business investment for the fourth quarter of 2007 is estimated to be 1.7 per cent higher than the same period of last year, and 0.5 per cent lower than the previous quarter.

The quarterly fall in business investment is due to reduced capital spending by industries classified within private sector non-manufacturing. There was reduced investment in industries within construction (down 10.4 per cent), other production (down 4.5 per cent), and distribution services (down 0.9 per cent). This was partly offset by an increase within other services (up 0.3 per cent)."