Business investment in mining sector fell significantly in Q2
The Covid-19 pandemic is being blamed for dragging business investment down.
UK business investment in the mining sector fell by 46.2% annually as the coronavirus pandemic damaged the economy, analysis of latest official data by specialist tax relief consultancy Catax shows.
Total business investment in the mining and quarrying sector fell to £1.4bln in the second quarter of 2020, down from £2.6bn in Q2 2019, latest ONS figures released on 21 October show. This was even more pronounced than the slowdown seen in the wider economy. Overall business investment across UK industry fell 26.1% in Q2 compared with the second quarter of 2019.
UK GDP shrank 20.4% in Q2, with widespread declines across all main sectors of the economy. However, the picture improved recently with the ONS reporting that GDP grew 8% in the three months to the end of August as lockdown measures eased, raising hopes of a steep recovery in investment.
Mark Tighe, CEO of Catax, notes, ‘The mining sector fared much worse than UK industry as a whole, with only the utilities and hospitality sectors performing worse with falls in business investment of more than half. It will take some time for investment to climb back to where it was at the start of the year, when the only threat on the horizon appeared to be Brexit negotiations. The speed of that recovery will depend very much on how long the second wave lasts and what disruption is to come’.