Business investment in transportation and storage has plummeted by nearly a third in a year as worries over Brexit loom large, analysis by specialist tax consultancy Catax shows.
Total business investment in the sector fell by 29% to £7.82bn in the first three quarters of 2018, down from £11.02bn for the same period in 2017, latest official figures show1.
This is indicative of a wider slowdown in the British economy, with business investment across all sectors growing at the most sluggish rate for six years in 20182.
Overall business investment dropped from £46.9bn to £46.2bn for the fourth consecutive quarter in 2018, the first time that has happened since the economic downturn in 20093.
Uncertainty over future border and travel rules post Brexit is a major worry to the transportation and storage industry which is heavily reliant on the free movement of goods and people between Europe and the UK.
Mark Tighe, CEO of Catax, comments:
“This dramatic collapse in business investment across the transportation and storage sector is a clear sign of crumbling confidence which is unsurprising in an industry that relies upon the free and smooth movement of goods between Britain and continental Europe.
“If Brexit results in hard border controls this could be hugely damaging for the transportation and storage sector in both Britain and neighbouring EU countries.
“Businesses are holding off on any investment decisions until they know the outcome as it could transform the whole industry.
“This stagnation is damaging our economy at a time when we need it to be performing better than ever.
“Tax relief on much business investment is available, but that on its own may not be enough to see a recovery in these numbers. Politicians need to move fast to get a good outcome for the UK, restore confidence and give investors in this and other sectors the certainty they need to take the bold decisions once again.”