The UK’s biggest businesses are preparing to invest up to £200bn in the next two years, according to research from Deloitte.
The survey of 132 senior executives of companies with revenues in excess of £1bn found 80% intend to invest this year, with close to 70% earmarking at least £250m to drive growth. Deloitte estimates the largest businesses among the group will invest up to £90bn in 2014, increasing to £107bn the following year.
However, the resurgence of business investment will be phased as some companies use cash for other purposes. Around 58% say they intend to return cash to shareholders this year and 11% will continue to focus on strengthening balance sheets.
There are also differences in investment strategy by sector and ownership type. Healthcare, telecommunications and chemicals companies appear set to lead large-scale investment this year, with consumer businesses and financial services companies more likely to delay investment until 2015.
Over 70% of non-listed businesses indicate they would invest in both 2014 and 2015, compared with 26% of listed companies.
Paul Feechan, senior partner for Deloitte in the North East, said: “Over the last 12 to 18 months the steadily improving economy has led to an increase in corporate risk appetite. However, that has not yet translated into the level of investment policymakers had hoped for.
“In 2013, businesses invested just £3bn more than they did in 2009.
“A well-balanced recovery requires a significant rise in corporate investment and a shift away from consumer-led growth. This investment is much needed and with the OBR also forecasting a 50% increase in capital spending over the next five years, all the signs are that it is on its way.”
Businesses have expressed a marginal preference for pursuing organic over inorganic growth. At present, 72% of respondents generate more than half of their revenues in the UK, but only 57% expect this to be the case by 2017.
Feechan added: “With businesses beginning to turn their attention to investing and exporting, it is positive that measures were announced in the Budget this month to encourage such activity.
“Britain has some catching up to do when it comes to global exports.
“We punch below our weight at present in certain key areas, so it is good that businesses acknowledge that growing revenues internationally is a necessity for the continued success of their own company and the UK’s prosperity more broadly.”