Press Release
For immediate release
Wednesday13th August 2003
Businessinvestment looks uncertain claims IoD
Business investment is unlikely to recover this year andmay only experience a moderate recovery next year according to the findings ofa new report published today by the Institute of Directors (IoD), Uncertainty,uncertainty, uncertainty the outlook for UK business investment.
TheIoD found that the degree of economic uncertainty at present provides companieswith an incentive to postpone or delay investment.
GraemeLeach, Chief Economist at the IoD, and author of the report, said:
Companiescontinue to act in a cautious manner whilst the Government spends money as ifthere is no tomorrow. Short and long-term economic prospects will improve whenthe corporate sector spends more and the Government spends and taxes less.
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Despiteshort-term difficulties, the report also shows that the UK does not have along-term problem of business under investment. Historically, the shortfallbetween total investment in the UK as a percentage of GDP and other G7economies has not centred on business investment but on public sectorinvestment - and residential.
Graeme Leach added:
Higher public investment in recent years has not helpedimprove economic performance. Over the 1996-2002 period cumulative publicsector productivity declined by more than three per cent - an abysmalperformance.
ENDS
Notes to Editors
1. Copies of Graeme Leachs paper, Uncertainty,uncertainty, uncertainty the outlook for UK business investment can beobtained from the IoD Press Office or downloaded in PDF format from www.iod.com
2. The Institute of Directors is a non-partypolitical independent organisation with around 55,000 members. In addition toits wide range of business services, the IoD provides an effective voice torepresent the interests of its members to government and key opinion-formers.It also brings the experience of business leaders to bear on the conduct ofpublic affairs
ContactPoints:
GraemeLeach, Chief Economist: 020 7451 3366
Richard Taylor, Press Officer, tel: 020 7451 3264
mobile and out of hours: 07721 734886
DavidMarshall, Director of Public Affairs, tel: 020 7451 3263
mobile and out of hours: 0776 4883420
email: press@iod.com