Britain’s shopkeepers are investing faster than the nation’s manufacturers, official government figures out this week show.
In a grim report that shows the UK trailing international rivals both in terms of the rate of new investment and in existing fixed assets, the only sign of healthy capital expenditure in UK industry is in the oil and gas sectors and in retailing.
The figures are revealed in the 1999 Capex Scoreboard, compiled by the Department of Trade and Industry’s Innovation Unit. The data was compiled from figures published in the 1998-99 accounts of 500 top UK and 300 top international companies.
The scoreboard shows the UK is lagging behind in physics-based industries in general and is under-represented in one of the fastest growing sectors, IT hardware.
Capital expenditure (or capex) in the UK is biased towards the retail sector and the offshore-dominated natural resources sectors.
By contrast, international capex is biased towards physics-based and telecoms industries. UK capex per employee and gross tangible fixed assets per employee – a measure of historic levels of investment – are only 50- 60% of international levels.
In engineering, average capex per employee in 1998 was £4,400 against an international average of £8,900. Fixed assets per employee stood at £40,000, against £100,000 internationally.
Aerospace came out as a rare example where the UK is investing more than the international competition.
The survey found that in most sectors, firms with higher capex have a proportionately higher level of sales.