Deloitte Monday Briefing: Looking For An Investment Boom

The Monday Briefing, written by Ian Stewart, Deloitte's Chief Economist in the UK, gives a personal view on topical financial and economic issues.

• The global financial crisis caused a slump in business investment. In some countries, notably the US, investment has bounced back, but in parts of Europe there has been no recovery. In the UK investment dropped by 26% in 2008/09 and since then it has stagnated. Investment is continuing to shrink in southern Europe.
• Investment accounts for around 15-20% of GDP in the industrialised world, so weak capital spending has acted directly as a drag on growth. It has had another, more insidious and longer term effect. As the stock of plant and machinery, vehicles and computers becomes older and more worn out, productivity suffers and with, it, growth. Imagine, for instance, the effect on output and efficiency of relying on laptops and software bought on the day Lehman collapsed five years ago.