Business investment in the utilities sector collapsed by 56.8% annually as the coronavirus pandemic ravaged the economy, analysis of latest official data by specialist tax relief consultancy Catax shows. Total business investment in the electricity, gas and water sector fell to £1.7bn in the second quarter of 2020, down from £3.9bn in Q2 2019, latest ONS figures released yesterday show. This significantly exceeds the dramatic slowdown seen in the wider economy. Overall business investment across UK industry fell 26.1% in 02 compared with the second quarter of 2019. UK GDP shrank 20.4% in Q2, with widespread declines across all main sectors of the economy. The picture has, however, improved more recently with the ONS reporting that GDP grew 8% in the three months to the end of August4 as lockdown measures eased, raising hopes of a steep recovery in investment. Mark Tighe, CEO of tax relief consultancy Catax, comments: "This year has caught everyone off guard. The second quarter was when the pandemic really saw economies slamming on the brakes, with the national lockdown in the UK being announced on March 23, just before it began. The utilities sector has seen a much steeper decline in business investment than the economy overall, which is likely a result of the way these companies are more reliant on a complex network of physical assets. This would have left them more vulnerable to lockdown disruption than some other sectors."
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