Business investment in the UK: January to March 2024 revised results

• UK business investment increased by 0.5% in Quarter 1 (Jan to Mar) 2024, revised down from our initial estimate of a 0.9% increase in the provisional estimate.

• The largest contributor to business investment growth was an increase in information and communication technology (ICT) and other machinery and equipment investment.

• UK business investment is 1.0% below where it was the same quarter a year ago.

• UK whole economy investment (technically known as gross fixed capital formation (GFCF)), which includes business and public sector investment, increased by 0.9% in Quarter 1 2024, revised down from a 1.4% increase in the provisional estimate.

• UK GFCF is 0.8% below where it was the same quarter a year ago.

This publication contains the latest updates to UK business investment and UK whole economy investment (technically known as gross fixed capital formation (GFCF)), which includes business and public sector investment data. Only Quarter 1 (Jan to Mar) 2024 data is open to revision.

Figure 1: Gross fixed capital formation (GFCF) and business investment both increased for the second consecutive quarter

UK business investment and whole economy investment, chained volume measure, seasonally adjusted, Quarter 1 (Jan to Mar) 1997 to Quarter 1 2024

Notes:

1. Q1 refers to Quarter 1 (Jan to Mar), Q2 refers to Quarter 2 (Apr to June), Q3 refers to Quarter 3 (July to Sept) and Q4 refers to Quarter 4 (Oct to Dec).

2. UK business investment, chained volume measure, seasonally adjusted, excluding the reclassification of British Nuclear Fuels (BNFL) in Quarter 2 2005.

3. Quarter 2 2020 was the largest fall on record for gross fixed capital formation excluding the reclassification of British Nuclear Fuels (BNFL) in Quarter 2 2005.

4. Index is referenced to Quarter 1 (Jan to Mar) 1997 = 100.

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Business investment

UK business investment increased by 0.5% in Quarter 1 (Jan to Mar) 2024 and is 1.0% below where it was the same quarter a year ago.

The Quarter 1 2024 growth is mostly driven by positive contributions from information and communication technology (ICT) equipment and other machinery and equipment investment and buildings investment. This is offset by negative contributions from intellectual property products (IPP), while contributions from transport were broadly flat.

UK business investment fell in Quarter 1 2024 relative to the same quarter a year ago. There were negative contributions from most headline components, with IPP contributing the most to the fall in business investment. Transport was the only component to contribute positively to headline business investment over this period.

Whole economy investment

UK GFCF increased by 0.9% in Quarter 1 2024 and is 0.8% below where it was the same quarter a year ago. The main contributors to the growth in GFCF in the latest quarter are dwellings, buildings, and ICT equipment and other machinery and equipment. These positive contributions are offset by a fall in IPP relative to the previous quarter, while transport growth is flat this quarter. These contributions are highlighted in the latest quarter data in Figure 2.

Business investment

UK business investment for Quarter 1 (Jan to Mar) 2024 has been revised down to a 0.5% increase in this release from 0.9% in the provisional estimate. This revision was caused by downward contributions from intellectual property products (IPP), transport and buildings investment, and slightly offset by a positive revision to information and communication technology (ICT) equipment and other machinery and equipment investment.

Whole economy investment

UK whole economy investment (technically known as gross fixed capital formation (GFCF)), which includes business and public sector investment, was revised down to a 0.9% increase in this release from 1.4% in the provisional estimate. These changes from the provisional estimate can be seen in Figure 2. This downwards revision is the result of downwards revised contributions from most of the headline GFCF components: buildings, IPP, dwellings and transport. ICT equipment and other machinery and equipment investment was the only component with an upwards revision to its contribution.

Using data collated by the Organisation for Economic Co-operation and Development (OECD) from relevant national statistical institutes, we can compare whole economy investment (labelled gross fixed capital formation (GFCF) in OECD data tables) within the G7 nations. Figure 3 shows quarterly whole economy investment growth for the G7 nations in Quarter 1 (Jan to Mar) 2024.

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).

Revisions

In line with our National Accounts Revisions Policy, the only period open for revision in this publication is Quarter 1 (Jan to Mar) 2024.

Data within this bulletin

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

In Quarter 1 (Jan to Mar) 2024, the Quarterly Acquisitions and Disposals of Capital Assets Survey (QCAS), the largest data source for gross fixed capital formation (GFCF) and business investment, had a response rate of 75.9% for estimates used in the revised release.

Adjustments

Large capital expenditure tends to be reported later in the data collection period than smaller capital expenditure. This means that larger expenditures are often included in the revised (month three) results but are not reported in time for the provisional (month two) results. This can lead to a tendency toward upward revisions in the later estimates for business investment and GFCF. Following investigation of the impact of this effect, from Quarter 3 (July to Sept) 2013, a bias adjustment was introduced in the provisional estimate.

This adjustment was suspended in Quarter 2 (Apr to June) 2020 because of uncertainties surrounding the effect of the coronavirus (COVID-19) pandemic. However, the bias adjustment was reintroduced to business investment and GFCF after further investigation and analysis of its impact since Quarter 4 (Oct to Dec) 2021. The bias adjustment, as usual, has been removed for the revised release.