Alarming fall in business investment heightens long-term dangers facing economy

Commenting on the revised business investment figures for the second quarter of 2009, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“Although the new figures show a marginally smaller decline in the quarter, revisions to earlier figures indicate a bigger year on year decline. With business investment down almost 22% over the year, the longer-term dangers to Britain’s productive potential cannot be ignored.

“In the face of weak demand, the banks’ reluctance to lend and serious financial pressures, businesses have little choice but to slash investment and stocks. However, such a situation cannot persist indefinitely without serious consequences.

“Unless business investment recovers, Britain will lack the capacity to meet rising demand when the recovery gathers momentum. It is critically important that the business sector is not damaged by long-term plans to restore the public finances to health.”

Ends

Media Contact:

Sam Turvey
Tel: 020 7654 5813
Email: s.turvey@britishchambers.org.uk

Notes to Editors:

The British Chambers of Commerce (BCC) is the National Voice of Local Business.
The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce serving business across the UK, which employ over five million people.