Proof that British industry is lagging behind the international competition in capital investment was provided in a report published last week by the Department of Trade and Industry.
In manufacturing, the picture for engineering/vehicles is more optimistic than general engineering.
The figures, from consultant Company Reporting for the DTI Innovation Unit, as a companion to the R&D scoreboard, ranks the 500 top UK companies and 300 top international companies in order of capital expenditure. Data is taken from annual reports published up to the end of August.
The DTI report focuses on four measures: gross fixed assets per employee; capital expenditure per employee in the most recent year for which figures were available; capital expenditure as a proportion of sales; and capital expenditure as a percentage of fixed assets, a measure of how quickly stock is being replaced.
For UK engineering firms, fixed assets per employee averaged £52,000 compared with £134,000 internationally. Capital expenditure per employee was £5,000 compared with £9,000 annually.
For the engineering/vehicles sector, fixed assets per UK employee averaged £74,000 compared with the £117,000 international average. Annual capital spending was £9,000 compared with £12,000 per worker. Japanese firms led the international rankings.
Norman Price, an industrialist on secondment to the DTI Innovation Unit, said the capex scoreboard makes it possible to compare not just last year’s expenditure but also accumulated capital.
‘In a knowledge-driven economy, capital expenditure embodies knowledge, enables product and service innovation and allows people to make better use of their skills to do their job,’ Price added.