Business investment in plant, machinery and IT grows
There was a significant increase last year in the amount of finance provided to businesses for plant, machinery and IT investment, according to figures released by trade association the Finance & Leasing Association (FLA).
IT equipment finance showed the highest growth in November, leading to new business growth in this market of 25 per cent in the eleven-month period to November 2012.
In the 11 months to November 2012, finance leasing and hire purchase for equipment grew by 9 per cent and 12 per cent, respectively.
In his November 2012 Autumn Statement, Chancellor George Osborne announced a temporary, ten-fold increase in the Annual Investment Allowance (AIA). The AIA allows businesses to claim an allowance on capital expenditure on most plant and machinery.
On 1 January 2013, the amount of investment that qualifies for 100 per cent relief increased from £25,000 to £250,000 for two years. Chancellor Osborne said that this would ‘cover the total annual investment undertaken by 99 per cent of all the business in Britain’ and that it would be a ‘huge boost’ to businesses.
The FLA’s head of research and chief economist, Geraldine Kilkelly, said: “The figures show growth in finance for key asset sectors as companies invest in the tools they need to grow their businesses.”
“IT equipment finance showed the highest growth in November, leading to new business growth in this market of 25 per cent in the eleven-month period to November 2012.”