KPMG comments on today’s business investment data
Instability and cost choking business investment” says Karl Edge, Head of Private Enterprise at KPMG UK.
Instability and cost choking business investment” says Karl Edge, Head of Private
“A drop in business investment during the last quarter was virtually unavoidable given the matrix of cost rises, consumer spending erosion and a dramatic mini Budget.
“Many business leaders were left with no choice but to hit the pause button on spending plans given both the lack of stability needed to enable them to place bets on the future shape of their enterprise and the fact that for some, funds earmarked for investment are being diverted into meeting the rising costs of simply continuing to trade. Management teams are assessing how much working capital they can afford to carry and the impact of this on their spending plans.
“However, for some, in particular smaller companies, it can only be a pause, not an abandoning of plans, as they are compelled to keep moving forward, with external funding arrangements often dependent on certain investment and growth milestones being hit. Businesses that can’t stop to take stock may be looking to flex investment actions, for example filling skills gaps with temporary rather than permanent resource (suggested by KPMG & REC Report on Jobs 10 Nov '22).”
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