Vehicles, equipment and IT goods dominate increase in capex spending for SMEs

An increase in capital expenditure for businesses in the UK is on the cards following a renewed confidence, GE Capital says.

Commercial vehicles and manufacturing equipment are set to be the main focus on small and medium-sized business (SME) capital expenditure investment.

The findings from GE Capital’s European SME Capex Barometer paint a more positive picture of SME confidence in Britain.

Of the 2,250 businesses questioned by GE Capital, 63 per cent feel positive about the future, compared to 9 per cent that do not. The gap between the two figures has grown since the firm’s 2013 survey when it stood at 52 per cent and 19 per cent.

UK SMEs now plan to increase capital expenditure investment by an average of 12 per cent during the next year, worth a reported £58.6 billion (or £58,200 per business).

Alongside commercial vehicles and manufacturing equipment (£35.9 billion forecast), investment in IT figures highly – at £17.8 billion.

Ilaria del Beato, chief executive of GE Capital UK, comments, ‘UK SMEs appear to have reached a crucial tipping point in their willingness to invest for growth and hire new staff.

‘This is a true measure of economic recovery and points to promising growth potential as greater investment should help boost productivity.’

More on business confidence in the UK:

On the hiring front, the survey finds that an extra 660,000 jobs are predicted to be created during the coming year, 26 per cent more than planned at the same time last year.

Existing company finances remains the most popular way to finance new capital investment, at 50 per cent, followed by leasing or structured finance at 17 per cent.

Despite the positive figures, German SMEs are planning on spending more, £95,600 per business.

‘Last year, planned increases in investment were somewhat tempered by a “wait and see” attitude, with many businesses ultimately putting off investment until absolutely necessary,’ del Beato adds.

‘The big difference this year is the greater emphasis on taking advantage of opportunities to expand, rather than just the necessity of replacing deteriorating equipment.’

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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