Small firms plan to spend £45.8bn in the next year – a 23 per cent increase on investment intentions in the first quarter of the year.
The research, by GE Capital, highlights a move to upgrade existing equipment. The results also predict a significant boost to UK employment, with SMEs planning to take on staff in much higher numbers compared to the start of the year.
“After a period of under-investment brought on by broader economic uncertainty, it’s good to see UK businesses once again looking to increase investment in capital expenditure and creating new jobs,” says John Jenkins, CEO of GE Capital UK.
Looking internationally, the research shows that UK businesses are posting the greatest increase in planned spend when comparing current investment intentions to those recorded in Q1 2012. German and Italian SMEs both post double-digit decreases in capital expenditure intentions, while France’s investment intentions are more similar to Britain, rising nearly 20 per cent.
Out-of-date and inefficient equipment is expected to have cost UK firms up to £14bn in net missed income, so the expected investment should benefit the British economy.
“A drive to modernise and upgrade equipment should spark a corresponding increase in productivity,” explains Jenkins. “This is a welcome sign for the UK economy and will provide a boost to wider economic recovery.”
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