Along with the output-based estimate of GDP, the ONS also publishes their first estimates for investment data, although only at the top level. This shows that total business investment (seasonally adjusted) was -4.0% lower than in the 1st quarter of the year but was broadly the same as a year ago (Q2-2024); the 4-quarter rolling trend stood at +3.4%.
At first glance, this decline is disappointing but this has to be tempered by a reminder that this covers the period when the US President announced and then rolled back a wide range of tariffs. Members will be well aware that uncertainty is the enemy of investment decision making, so it is, perhaps, slightly surprising that the decline was not larger, especially as the 1st quarter total was boosted by the arrival of new aircraft. It is also worth noting that the annualized rate (the 4-quarter moving total) is still positive.
The breakdown by industry group won’t be available until the full National Accounts are published at the end of September but we can look at the split by asset type. There are five categories, of which “ICT equipment & other machinery & equipment” (ICT&OM) is the most relevant to us – the other headings are transport equipment (which includes new aircraft – see above), dwellings, other buildings & structures and intellectual property products.
On a seasonally adjusted basis, spending on ICT&OM in the 2nd quarter -2.4% down on the 1st period of the year but +2.7% higher than a year ago, with the 4-quarter moving total growing by +1.3%. This is a slightly different pattern to overall business investment that is largely driven by the movements of new aircraft not being in this asset category.
Thanks to the stronger quarter-on-quarter growth for ICT&OM than in the total, this asset group accounted for 30.6% of business investment in Q2-2025; this is the highest ratio since Q1-2024.
You can download the ONS Statistical Bulletin on productivity from their website at https://www.ons.gov.uk/releasecalendar (14 August) or request if from MTA.