Forty-four percent of UK food and drink manufacturers increased capital expenditure in the second quarter of 2013, according to the Food and Drink Federation (FDF) Business Confidence Survey.
The number of respondents investing in R&D and training increased. Findings also revealed firms were confident of sales growth in the third quarter, due to improved weather and a reviving economy.
UK sales grew in the second quarter in line with inflation, with 20% more businesses are expecting sales growth in Q3. Export sales are expected to remain strong in the third quarter.
Of the respondents, 73% expected product prices to be broadly stable in the third quarter due to summer promotions.
Steve Barnes, economic and commercial services director, at FDF, said: “This third successive quarter showing increasing business optimism amongst food and drink manufacturers is good news for the UK economy. 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.”