Chambers report

Investment to fall despite strong economic recovery

Glasgow Business Park

Investment may fall because of tax rises and lingering Covid concerns

Business investment is expected to fall this year even as the economy grows at a pace not seen for 72 years.

The British Chambers of Commerce expects the economy to expand this year by 7.1%, which would be the strongest outturn since official records began in 1949.  

Staff shortages and supply chain disruption are expected to delay the return to pre-pandemic levels of GDP growth until early next year with growth of 5.2% forecast for 2022. 

The recovery is expected to be driven by historically strong consumer and government spending.

But business investment is forecast to decline by 2.5% this year because of the damage done to firms’ finances by the pandemic, a more onerous tax regime and concerns over the potential for future Covid restrictions which will weigh heavily on investment intentions.

Consequently, business investment is forecast to remain 5.4% lower than its pre-pandemic level by the end of 2023.

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