Fall in business investment heightens long-term threats to the economy - Lincolnshire Chamber of Commerce and Industry, UK

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

“The new figures are worse than expected and show alarming declines both quarterly and annually. With annual falls in business investment of 24%, and 35% for manufacturing specifically, the longer-term threats to Britain’s productive potential are very serious.

“In the face of weak demand and acute financial pressures, businesses have had little choice but to slash investment and stocks in order to survive. But, such a situation cannot persist over the long-term without damaging consequences.

“Unless business investment picks up, the UK will lack the capacity to meet growing demand when the recovery eventually gathers momentum.

“In order to promote investment, companies need continued support now – and the confidence that a credible plan is in place to mend our public finances as the recovery takes hold.”