Big business ready to invest, says survey

BIG businesses are preparing to loosen the purse strings this year amid growing optimism, according to new research,

Business advisers Deloitte said there is increasing evidence that corporate UK is becoming more willing to invest. In a survey of 126 companies generating revenues of more than £1bn, 60% said they intend to invest at least £50mn this year in growth initiatives and a further 30% will do likewise within two years.

Encouragingly, 68% of business leaders expect the next three years to be a period of growth for their business, with 28% saying it is about stability and just 4% focusing on surviving.

Meanwhile, two-thirds (66%) of leaders in these big business say growth will come mainly or overwhelmingly from international markets in the next three years, with 37% forecasting overseas growth of more than 75% in this period.

For those looking at entering new markets, forming alliances with local partners was the most popular means of entry, with 60% of respondents considering such a move. 55% said they were looking at options for M&A activity while 44% are seeking to grow organically.

Richard Bell, partner at Deloitte in the North West, said: “The low growth environment of the past five years, coupled with levels of consumer and government debt, mean that business has to take a lead in driving a new era of wealth creation in the UK. 80% of respondents in our survey believe that business is best placed to do this.

“British business emerges from this hugely challenging period in reasonable health and with balance sheets bolstered to the extent where UK plc now holds in excess of £700bn in cash. This gives UK companies the firepower to invest for growth. Our research indicates that appetite is growing too.”