ONS figures show increase in business investment

New interim construction price deflators mean previous figures upwardly revised.

New figures released by the Office for National Statistics show that business investment was on the rise in the first quarter of 2015.

Compared with the same quarter of last year, business investment has increased by 5.7%, which equates to an estimated rise of £0.9Bn.

Now up to £46.5Bn, business investment is also higher than it was in the previous quarter, with the figures reporting a 2% increase.

The figures, which are estimates of seasonally adjusted chained volume measures, seem to bode well for the construction industry, with transport equipment and dwellings also reporting increases.

Going into more details, the figures show transport equipment has shot up by £0.6Bn, which represents its highest level since the final quarter of 2010. Meanwhile, dwellings rose by £0.5Bn – which equates to 3.2%.

Today’s figures show these figures are asset breakdowns of total gross fixed capital formation (GFCF), and this particular figure also makes for positive reading.

Compared with the corresponding quarter of last year, GFCF rose by 5%, and by 2% when judged against the previous quarter.

This 2% upturn means GFCF is now £76.1Bn – an increase of £1.5Bn from the final quarter of 2014.

Significantly, this level is at its highest since records for this began back in 1997.

The figures from the ONS now have new interim construction price deflators incorporated, which have been good for the construction industry because not only does it make the figures reported more accurate, but this release in particular has led to upward revisions to those levels of GFCF from the first quarter of 2014.

ONS also released its index of services results today for April 2015, which is important given it is the biggest contributor to the output approach of GDP.

Overall, the index of services went up by 2.8% in April, compared with the April before.

When broken down into the four main areas, business services and finance is up by 3%, and Government and other services rose by 0.6%.

In the month-to-month comparison, these two areas did not make any progress, but overall, between March and April 2015, the index of service also increased by 0.2%.

 

The post ONS figures show increase in business investment appeared first on UK Construction Online.