Oil and gas sector leads UK capital expenditure

BRITAIN'S IMAGE as a nation of shop keepers is reinforced by figures published today showing that retailers spent more on property, machinery, equipment and technology last year than the engineering industry.

The second annual Capital Expenditure Scoreboard, published by the Innovation Unit at the Department of Trade and Industry, shows that stores groups - led by Tesco, J Sainsbury and Marks & Spencer - accounted for nearly 9 per cent of the pounds 75bn that British businesses spent in this way last year. Engineering companies spent just 8 per cent of this total.

But the sector leader was oil and gas, thanks to Shell and BP Amoco being based in Britain. They and other companies in this field accounted for 21 per cent of the country's capital expenditure - meaning the amount of capital behind each employee in the sector is pounds 781,000. Over 25 per cent of UK capital expenditure investment came from the six biggest spenders, two each from the oil and gas, telecommunications and transport sectors.

This is the second time the figures, compiled by the financial monitoring unit Company Reporting, have been published. They rank the spending by 500 UK-based companies and British subsidiaries of foreign-owned companies and 300 international companies in 33 industrial sectors. The DTI sees them as complementing the annual Research and Development Scoreboard in the effort to measure British industry's international competitiveness.

Norman Price, an industrialist at the innovation unit and an author of the report, said the table showed British companies were investing enough to avoid falling further behind overseas competitors but not enough to close the gap. Though there is need for improvement, Mr Price said there was potential to reduce the deficit. He pointed to the presence of 32 British companies, compared with 20 from France and 19 from Germany, in the top 300 international spenders on capital equipment.