UK business investment soars as GDP uptick confirmed
Business investment in the U.K. saw a sharp rise in the final quarter of 2013, fueling strong quarterly growth in a sign that the country's economy is becoming more broad based.
Gross domestic product rose 0.7 percent in the last three months of 2013 from the previous quarter, Britain's Office for National Statistics (ONS) confirmed on Wednesday.
It comes as business investment saw a 2.4 percent uptick compared with the previous quarter, and surged 8.5 percent compared with the fourth quarter of 2012.
Many analysts had feared that the U.K.'s economic recovery was uneven and based on consumer spending, which rose 0.4 percent in the final quarter of 2013. But these latest figures will boost hopes of a sustainable recovery looking ahead.
"These figures provide reassurance the economy is being better balance and likely to be sustained," Samuel Tombs, U.K. economist at Capital Economics, told CNBC.
The pickup in business investment was confirmed by U.K. CEOs, who told CNBC they were seeing signs of a turnaround in their sectors.
"Construction and building really got hit hard in the downturn. And I think it has now stabilized with signs that it could start to grow," John Carter, CEO of building material supplier Travis Perkins, said on Wednesday.
"We feel we are going to get on our front foot now, and start to expand our network' and grow our business."
His comments came after data released earlier this month revealed that construction output rose 0.2 in the final three months of 2013. This followed a 2.6 percent upswing in the previous quarter, as government mortgage schemes boosted demand for housing ' although this has fueled some fears of a property bubble.
The rosy economic picture goes beyond construction, according to a new study from PwC, which said it is being felt across U.K. private businesses.
Over half of the 421 U.K. private business leaders surveyed agree that the positive economic news reflected their current experience, with 38 percent saying they intended to hire new staff this year.
"On balance, the U.K.'s private business leaders are positive about prospects for the year ahead," PwC partner Stephanie Hyde said in a statement.
"There are patches of good growth across the U.K., despite many businesses still dealing with tough trading conditions and the demands of adaptation."
The CEO of recruitment agency Hays, meanwhile, told CNBC that the U.K. still suffers skills shortages.
"More and more sectors worldwide are starting to face some quite acute skills shortages, including here in the U.K.," Alistair Cox said on Wednesday.
But Cox said he was sure the "highly skilled opportunities" in British industry would be filled, leading to yet more job opportunities.
"If you can fill a senior role you then start to cascade the creation of more junior or lower skilled roles around that senior role. That is why we are so keen that we can fill all of those highly skilled opportunities that British industry is creating today," he said.
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