44% of UK food and drink manufacturers responding to the Food and Drink Federation (FDF) Business Confidence Survey increased capital expenditure in Q2 2013, buoyed by a third successive quarter of increased business optimism and an increase in the Annual Investment Allowance in 2013. Investment in R&D and training also increased.
The Food and Drink Federation is the voice of the UK’s food and drink manufacturing industry.
Additional findings reveal a sector confident of sales growth in Q3 driven by the improved weather and a reviving economy. UK sales in Q2 grew in line with inflation, but 20% more businesses are expecting sales growth in Q3 compared to the quarter. Respondents expect export sales to remain strong in Q3.
72% of respondents expect product prices to be broadly stable in Q3 due to summer promotions.
“This third successive quarter showing increasing business optimism amongst food and drink manufacturers is good news for the UK economy,” said FDF's economic and commercial services director, Steve Barnes. “Despite challenging businesses conditions brought on by poor weather and high ingredient prices, manufacturers achieved stability in Q2 and are optimistic of increased sales in the next."
“To further contribute towards a rebalanced UK economy and deliver our shared vision with government to grow our sector by 20% by 2020, manufacturers are investing in innovation and workforce skills. Increased capital expenditure by 44% of businesses responding to our survey can in part be attributed to temporary changes to the Annual Investment Allowance which offers businesses tax relief on investments of up to £250,000. I would encourage other food and drink businesses planning investment to make the most of this measure while it is available.”
