Business investment in the UK mining sector has plummeted by nearly one-sixth in a year, as worries over the UK leaving the European Union (EU) loom large, analysis by specialist tax consultancy Catax has shown.
Citing information by the Office for National Statistics, Catax states that business investment in the mining sector fell by 14.4% to £2.2-billion in the first three quarters of 2018, down from £2.5-billion for the same period in 2017.
This, the consultancy says, is indicative of a wider slowdown in the British economy, which grew at its most sluggish rate for six years in 2018.
Overall business investment fell from £46.9-billion to £46.2-billion in last three months of 2018. This was the fourth consecutive quarterly decline, the first time that has happened since the economic downturn in 2009.
It is a challenging time for businesses, which have been unable to solidify their expansion and investment plans while faced with an uncertain future relationship with the EU.
“The mining industry is affected by all kinds of factors but this is a sizeable contraction in business investment at a time when Britain is facing one of its most intimidating political tests.
“The spectre of Brexit looms large in these numbers. It is easy to imagine that, in an industry with a relatively small number of players in which investment can command colossal sums, it has been especially hard to continue to set out and execute detailed spending plans when the future of the UK’s relationship with the EU has been shrouded in such doubt,” said Catax CEO Mark Tighe.
Business investment among mining companies was particularly weak in the first quarter of 2018 at £366-million, but picked up in the third quarter, hitting £806-million between September and October — an increase of £73-million from the £733-million recorded a year earlier.
The British Parliament will vote on the Brexit deal on Tuesday, following Prime Minister Theresa May’s last-minute negotiations with European Commissioner president Jean-Claude Juncker on Monday. The agreement centres on the so-called backstop of the withdrawal agreement designed to keep an open border in Ireland.
The UK is due to leave the EU in less than two weeks.