Revised figures released by the Office for National Statistics this morning show that business investment in assets (premises, machinery and intangible assets) rose 2.4% in the first quarter of 2014 to total £56.9 billion – the largest figure since the last quarter 2008. Intangible assets recorded the largest rise – 8.3% – due to increased spending on software.
Business investment also rose significantly to £33.4 billion, an increase of £1.6 billion (5%) compared to the final quarter of 2013. Both measures have now recorded five consecutive quarters of growth – the first time this has happened for 16 years.
When compared to the same period in 2013 the growth figures are even more positive – investment in assets grew 9.7%, while business investment increased 10.6%.
This new data is the latest in a series of positive growth stories for the UK economy. In just the last few weeks figures have shown that the construction industry is bouncing back from the financial crisis, the manufacturing industry is expecting strong growth in 2014, and that investment in new businesses is back at pre-recession levels. However the UK economy is not out of the woods yet – several studies have revealed wage growth remains sluggish, and the public are still waiting to feel the benefit of the resurgent economy.
The figures will also be welcomed by startups, entrepreneurs and those considering self-employment. Investment in new business is a key economic indicator, and startup capital has been notoriously hard to come by throughout the financial crisis. Investment in business will aid job creation which, in turn, should lead to a rise in wages in real terms.
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