The stagnant UK economy is hindering businesses investment in technology, according to new research from Siemens Financial Services (SFS).
From the results of the survey SFS has predicted that business investment will decrease by two per cent on the same period last year, amounting to a loss of £1.5bn.
The research also revealed that SMEs are predicted to make the most cutbacks, with small businesses seeing a 2.54 per cent fall in investment, medium businesses a 2.42 per cent fall and large companies of over 2,500 employees only a 0.9 per cent fall.
Business leaders also cited their top financial priority as ‘improving profitability’ (62.3 per cent), followed by ‘reinvesting in the business’ (46.3 per cent) and ‘increasing turnover’ (39.5 per cent). ‘Returning cash to shareholders’ was only a priority for 15.4 per cent.
Peter Austin, general manager SFS, said: “The primary reason that companies are putting back their procurement plans is because they are overly reliant on bank finance, which we know is badly hit by the credit crunch and the subject of major credit limit revisions and cost increases.
“Historically, the UK’s reliance on bank finance is reflective of an ownership mentality that has become ingrained during the years of inexpensive credit.”
Respondents were also asked where their investment priorities lie over the next three years, with half stating IT software (50.5 per cent) , 49.7 per cent responded IT hardware and 40.7 per cent said training.
Austin added: “A leasing plan would help businesses avoid the need for a large upfront payment, spread costs and bring much-needed transparency to their financial planning.”
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