According to the latest ONS data, UK business investment increased by +1.7% in Q2 2026, accelerating from the +0.9% increase recorded in Q1. Investment was also +0.8% higher than in Q2 2025, marking a significant improvement from the -1.3% year-on-year position recorded in Q1.
Within this, investment in “ICT & other machinery equipment” – a category closely linked to demand for machinery, production equipment and industrial technology – has continued to outperform overall business investment. Following a softer and more volatile period during 2023 to 24, investment in this category strengthened through 2025 and into early 2026, with the latest data showing continued momentum in Q2.
Over 2025 as a whole, total business investment increased by +4.3%, while investment in “ICT & other machinery equipment” rose by a stronger +7.0%. The latest quarterly data indicate that this relative strength has continued into 2026, with ICT and machinery investment identified by the ONS as a major contributor to the increase in business investment in Q2.
The Q2 improvement is particularly notable given the wider economic environment. Business investment had been -1.3% below its year-earlier level in Q1, following the revision of the Q1 estimate to +0.9% q/q. The return to year-on-year growth in Q2 therefore suggests that the recovery in corporate capital spending is gaining some traction.
The continued strength of machinery and ICT-related investment points to a more supportive environment for machine tool, cutting tool and wider capital equipment demand heading further into 2026. Investment aimed at improving productivity and efficiency, including digital technologies and automation, is likely to remain an important part of this picture. The growing importance of technology-related investment may also provide support for demand associated with AI and data infrastructure, although the ONS data do not separately identify AI-related spending.
Overall, the Q2 figures strengthen the case that the recovery in UK machinery and technology-related investment is becoming more established, despite continued uncertainty over economic growth and manufacturing conditions. The latest ONS data release is therefore a positive signal for capital equipment markets, although the data remain provisional and are subject to revision.
You can download the ONS Statistical Bulletin on UK Business Investment from their website at https://www.ons.gov.uk/releasecalendar (13th August) or request if from MTA