John Jenkins, Chief Executive of GE Capital UK said: “The reality is that SMEs are still investing to gain a competitive advantage and showing resilience in the face of strong economic headwinds. Those companies that continue to invest and take advantage of the latest technology are likely to gain share and grow quickest when the market fully returns.”
The UK remains less likely to invest than its European counterparts, a trend continuing from the last survey. The latest results find that across Europe, German SMEs are once again likely to invest most heavily on capital expenditure over the coming year. German SMEs are intending to invest £95.8 billion – more than double the intended spend of UK SMEs.
In the other major economies surveyed, Italian SMEs are looking to invest £66.7 billion over the next 12 months. French SMEs are closest to the UK in terms of their intended investment with businesses across France looking to spend nearly £41.7 billion. The total intended spend on capital expenditure across the four major European economies surveyed is over £241 billion – down by 39% compared to investment intentions six months ago.
Across the combined economies of the UK, Germany, France and Italy, roughly half of all intended capital expenditure – equating to almost £115 billion – is expected to be allocated to investing in manufacturing equipment over the next 12 months. UK SMEs are planning to spend just under £15 billion on this segment, or an average of £14.8k per SME. This number is lower than each of the other economies’ intended spend on manufacturing, however, and is down by 62% versus planned spend on manufacturing equipment in Q3 2011.
GE Capital’s ‘SME Capex Barometer’ is a regular, bi-annual survey of 1750 European business leaders (250 of which are UK based) designed to provide an ongoing view on investment intentions among European SMEs.