Table of contents
- Main points
- Business investment growth revised down as levels increase
- Gross fixed capital formation (GFCF) components remain above pre-coronavirus level despite downward revisions
- International comparisons of gross fixed capital formation (GFCF) for the G7 nations
- Business investment data
- Measuring the data
- Related links
- Cite this statistical bulletin
1. Main points
Business investment fell by 2.5% in Quarter 3 (July to Sept) 2022, revised down from the provisional estimate of negative 0.5%.
The level of business investment in Quarter 3 2022 was 8.1% below where it was in Quarter 4 (Oct to Dec) 2019, the quarter before the coronavirus (COVID-19) pandemic; business investment was 1.3% above where it was the same quarter a year ago.
Whole economy investment (technically known as gross fixed capital formation (GFCF)), which includes business and public sector investment, increased by 1.1% in Quarter 3 2022, revised down from the provisional estimate of 2.5%.
Whole economy investment (GFCF) in Quarter 3 2022 was 0.2% above where it was in Quarter 4 2019, the pre-coronavirus quarter; GFCF was 3.7% above where it was in Quarter 3 2021 revised down from 5.8%.
2. Business investment growth revised down as levels increase
Business investment in Quarter 3 (July to Sept) 2022 remains below pre-coronavirus (COVID-19) levels at negative 8.1%, an upwards revision from the provisional estimate of negative 8.4%. Though business investment levels increased in Quarter 3 2022, business investment growth in this period was revised downwards by 2 percentage points, because of an upwards revision in Quarter 2 (Apr to June) 2022 business investment levels. The main cause of these upwards revisions in the previous quarter was other buildings and structures because of later survey data. Purchased software, hardware and other machinery also contributed positively to the revisions.
Figure 1: Business investment’s return to pre-coronavirus pandemic levels has lagged behind that of economy-wide gross fixed capital formation (GFCF)
UK business investment, chained volume measure, seasonally adjusted, Quarter 1 (Jan to Mar) 1997 to Quarter 3 (July to Sept) 2022
- 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).
- UK business investment, chained volume measure, seasonally adjusted, excluding the reclassification of British Nuclear Fuels (BNFL) in Quarter 2 2005.
- Quarter 2 2020 is the largest fall on record for gross fixed capital formation excluding the reclassification of BNFL in Quarter 2 2005.
- Index is referenced to Quarter 1 1997.
Download the dataBack to table of contents
4. International comparisons of gross fixed capital formation (GFCF) for the G7 nations
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 GFCF data for the G7 nations back to Quarter 1 (Jan to Mar) 2021.
In recent periods, the UK has experienced strong GFCF growth relative to the other G7 nations. Since Quarter 1 2021, UK growth was the largest out of the G7 nations in four out of seven quarters, including Quarter 3 (July to Sept) 2022. In this most recent quarter, UK growth was 1.6 percentage points ahead of France, which had the second highest growth. Most of the G7 nations saw an increase in growth in Quarter 3 2022 relative to the previous quarter except Japan, which saw a slight decrease, and Italy, which saw a larger fall. Notably, these two nations had the highest growth in Quarter 2 (Apr to June) 2022. Italy showed strong growth through 2021 and Quarter 1 2022, but growth has now fallen for two consecutive quarters. Despite showing an increase in the latest quarter, both Canada and the US remain in negative territory for the second consecutive quarter.
The UK showed high levels of volatility through 2021 and into 2022, with differences of up to 6.5 percentage points between growth in consecutive quarters. Canada similarly showed volatile growth over this period, experiencing some of the highest growth in Quarter 1 2021 and Quarter 4 (Oct to Dec) 2021, along with some of the lowest growth in Quarter 3 2021 and Quarter 2 2022. In contrast, the growth of France and the US has tracked the average growth of the G7 nations for most quarters since the beginning of 2021.
Figure 3: UK growth of gross fixed capital formation (GFCF) compared with the G7
G7 nations quarter-on-quarter growth of GFCF, current price, seasonally adjusted, Quarter 1 (Jan to Mar) 2021 to Quarter 3 (July to Sept) 2022
Source: Office for National Statistics – Business Investment results, OECD
- The G7 is an intergovernmental organisation consisting of Canada, France, Germany, Italy, Japan, the UK and the US.
- The coronavirus (COVID-19) pandemic has affected each country in different ways and as a result, restrictions have been put in place at differing times by each country.
- Data shown in this chart reflect the latest available at the time of production of this bulletin, including provisional data, which may subsequently be revised.
Download this chart Figure 3: UK growth of gross fixed capital formation (GFCF) compared with the G7Image .csv .xls
5. Business investment data
Gross fixed capital formation – by sector and asset
Dataset | Released 22 December 2022
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 22 December 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 Capital Assets Survey (QCAS) and Quarterly Stocks Survey (QSS).
Annual gross fixed capital formation by industry 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.
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).
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
These 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 email@example.com. A detailed list of the time series affected are available upon request. Availability of the more detailed GFCF data has also impacted Capital stocks and consumption of fixed capital and the National balance sheet estimates. The release calendar will be updated when we are able to make the data in these publications available.
In line with the National Accounts Revisions Policy, the earliest period open in this publication is Quarter 1 (Jan to Mar) 2021.
Data within this bulletin
All data within this bulletin, unless specified, are presented in chained volume measure (CVM). This means they have the effect of price changes 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 the provisional release, and 75.9% for estimates used in this revised release. This compares with an average response rate of 71.1% during 2020, and 82% for 2019 for the revised results.Back to table of contents
8. Cite this statistical bulletin
Office for National Statistics (ONS), released 22 December 2022, ONS website, statistical bulletin, Business investment in the UK, provisional: July to September 2022
Contact details for this Statistical bulletin
Telephone: +44 1633 455250