Business investment in the UK: July to September 2022 provisional results

Estimates of short-term indicators of investment in non-financial assets, business investment, and asset and sector breakdowns of total capital formation.

This is the latest release. View previous releases

11 November 2022

On 30 September 2022, we advised that we needed more time to produce a Blue Book 2022 consistent gross fixed capital formation (GFCF) dataset. This meant we were unable to produce some of the more detailed, mainly industry, data that normally accompany the Business investment in the UK bulletin.

This included:

  • business investment by asset

  • business investment by industry and asset

This also included breakdowns of:

  • the transportation and storage industries

  • household and non-profit institutions serving households (NPISH)

  • new dwellings and improvements to dwellings

  • ICT equipment

  • intellectual property products

We advised we would be releasing these alongside our provisional estimate of business investment datasets published on 11 November 2022. They will instead be published on the User Requested Data section of our website at a future date to be determined. If you would like to be alerted as soon as they are available, please contact gcf@ons.gov.uk.

A detailed list of the time series affected are available upon request.

Estimates of consumption of fixed capital and productivity will have been affected by the later availability of these more detailed data. Further information will be included alongside those outputs.

This is an accredited National Statistic. Click for information about types of official statistics.

Contact:
Email Alison McCrae

Release date:
11 November 2022

Next release:
22 December 2022

1. Main points

  • Business investment fell by 0.5% in Quarter 3 (July to Sept) 2022.

  • The level of business investment in Quarter 3 2022 is 8.4% below where it was in Quarter 4 (Oct to Dec) 2019, the quarter before the coronavirus (COVID-19) pandemic; gross fixed capital formation (GFCF) levels are 0.8% above that same quarter.

  • Whole economy investment, which includes business and public sector investment, increased by 2.5% in Quarter 3 2022 and was 5.8% higher than in the same quarter a year ago.

  • Most assets contributed positively to growth in whole economy investment, with the largest contribution coming from dwellings with a growth of 4.2%. Transport equipment was the only negative contributor to whole economy investment growth.

  • Government investment grew by 7.6% in the latest quarter. Other buildings was the main driver behind the growth in government investment.

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Current business investment estimates continue to be subject to more uncertainty than usual because of data collection challenges faced in the current conditions. More information can be found in section 5.

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2. Business investment lags behind whole economy investment

Business investment has still not returned to pre-coronavirus (COVID-19) pandemic levels while whole economy investment (technically known as Gross Fixed Capital Formation - GFCF) has returned to pre-pandemic levels as of Quarter 3 2022. This reflects the different patterns of investment by government and businesses observed throughout the coronavirus pandemic (Figure 2). The positive growth of dwellings and government investment in the latest quarter are the main factors in GFCF returning to its pre-coronavirus (COVID-19) pandemic level.

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3. Majority of Gross Fixed Capital Formation (GFCF) components above pre-coronavirus pandemic level

While the majority of GFCF components have returned to Quarter 4 2019 levels, GFCF in other buildings and structures (which includes non-residential buildings and structures such as roads, bridges and energy-related structures) has not, and remains 10.7 percentage points lower than its pre-coronavirus pandemic level. The low level of business investment in other buildings and structures is the main reason for whole economy other buildings and structures being weaker than its pre-coronavirus pandemic level.

Dwellings continued to grow and exceeded its pre-coronavirus pandemic level in Quarter 4 (Oct to Dec) 2021. Dwellings investment increased by 4.2% in Quarter 3 (July to Sept) 2022. Repair and maintenance of dwellings continues to grow but at a slower rate than seen during the pandemic when many took the opportunity to complete home improvements. New housing investment continues to grow with large housebuilders pushing through on projects in order to complete before the year end.

Transport equipment has fallen by 4.2% in Quarter 3 2022 yet remains above its pre-coronavirus pandemic level. Transport equipment continues to fluctuate as manufacturers report varied success in acquiring parts and materials needed to complete cars and other transport equipment according to respondent comments to our Quarterly Acquisitions and Disposals of Capital Assets Survey (QCAS).

Investment in ICT equipment and other machinery and equipment exceeded pre-pandemic levels in Quarter 1 (Jan to Mar) 2022 and continues its quarter-on-quarter growth with a growth of 4.1% in Quarter 3 (July to Sept) 2022.

This period coincides with the availability of temporary tax relief on qualifying capital asset investment, known as "super-deduction", as explained on the GOV.UK website. Even though there are some differences in qualifying items, the impact of this incentive is most likely to be reflected in information and communication technology (ICT) equipment, and other machinery and equipment. There has however been little reference to this temporary tax relief in respondent comments to our Quarterly Acquisitions and Disposals of Capital Assets Survey (QCAS).

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4. Comments analysis

The themes in respondent comments to our Quarterly Acquisitions and Disposals of Capital Assets Survey (QCAS) have changed substantially since the quarters after the EU Exit and coronavirus (COVID-19) pandemic. Now only 0.6% of all comments mention the EU compared with the peak of 2.8% in Quarter 3 (July to Sept) 2019. Coronavirus comments make up just 1% of all comments compared with the peak of 49% of all comments in Quarter 2 (April to June) 2022. Comments mentioning uncertainty remain a factor with 3.7% of respondent comments mentioning it. Continued trends include the mention of investing in ICT and machinery as well as investment in cars.

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5. Business investment data

Business investment by industry and asset
Dataset | Released 12 August 2022
Detailed breakdown of business investment by industry and asset, in current prices and chained volume measures, non-seasonally adjusted and seasonally adjusted, UK.

Business investment by asset
Dataset | Released 12 August 2022
Detailed breakdown of business investment by asset, in current prices and chained volume measures, non-seasonally adjusted and seasonally adjusted, UK.

Gross fixed capital formation - by sector and asset
Dataset | Released 11 November
Sector and asset breakdowns of gross fixed capital formation (GFCF), including business investment and revisions, in current prices and chained volume measures, non-seasonally adjusted and seasonally adjusted, UK.

Quarterly Stocks Survey (QSS) and Capital Assets Survey (QCAS) Textual Data Analysis
Dataset | Released 11 November 2022
The indicators and analysis in this dataset are based on qualitative responses from comments left by responding businesses to both our Quarterly Acquisitions and Disposals of (QCAS) and Quarterly Stocks Survey (QSS).

Annual Gross fixed capital formation - by sector and asset
Dataset | Released 28 October 2021
Annual sector and asset breakdowns of gross fixed capital formation (GFCF), in current prices and chained volume measures, non-seasonally adjusted and seasonally adjusted, UK.

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6. Measuring the data

Quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in our Business investment quality and methodology information (QMI) release.

Revisions

In line with the National Accounts Revisions Policy, the only period open in this publication is Quarter 3 (July to Sept) 2022.

Data within this bulletin

All data within this bulletin, unless specified, are presented in chained volume measure (CVM). This means that the effect of price changes is removed (in other words, the data are deflated).

In Quarter 3 (July to Sept) 2022, the Quarterly Acquisitions and Disposals of Capital Assets Survey (QCAS), one of the largest data sources for gross fixed capital formation (GFCF) and business investment, had a response rate of 62.4% for estimates used in this provisional release. This compares with an average provisional response rate of 57.7% during 2021, 56.5% during 2020, and 67.3% for 2019.

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8. Cite this statistical bulletin

Office for National Statistics (ONS), released 11 November 2022, ONS website, statistical bulletin, Business investment in the UK: July to September 2022 provisional results

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Contact details for this Statistical bulletin

Alison McCrae
gcf@ons.gov.uk
Telephone: +44 1633 455250