Business investment in the health and social work sector rose 17.2% annually as the coronavirus pandemic ravaged the economy, analysis of latest official data by specialist tax relief consultancy Catax shows1.
Total business investment in the sector increased to £1.1bn in the second quarter of 2020, up from £970m in Q2 2019, latest ONS figures released yesterday show1.
This bucked the trend seen in the wider economy as it was the only sector to post an increase instead of a decline. Overall business investment across UK industry fell 26.1% in Q2 compared with the second quarter of 20192.
UK GDP shrank 20.4% in Q2, with widespread declines across all main sectors of the economy3.
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 overall.
Mark Tighe, CEO of tax relief consultancy Catax, comments:
“This year has caught everyone off guard but the health and social care sector has totally bucked the trend of declines in business investment seen across other industries.
“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.
“It will take some time for overall business investment to climb back to where it was at the start of the year, when the only threat on the horizon appeared to be Brexit negotiations. The speed of that recovery will depend very much on how long the second wave lasts and how much disruption is to come.”