September 1, 2013 / 11:14 PM / 6 years ago

UK manufacturers' investment plans strongest in six years: poll

Shoppers browse handbags for sale at Covent Garden market in central London August 6, 2013. REUTERS/Chris Helgren

LONDON (Reuters) - British manufacturers are planning the fastest increase in capital investment in the year ahead since before the financial crisis, a survey showed, suggesting the economy could be heading for a more balanced recovery.

Manufacturers’ association EEF and accountants BDO LLP said on Monday a balance of 24 percent of companies intended to buy machinery and equipment, up from 7 percent in the May poll.

That was the highest reading since 2007 and the second-highest since the quarterly survey began in the mid-1990s.

Official data released last month showed business investment rose in the second quarter for the first time in nine months, a shift away from the economy’s reliance on consumers, a debt-fuelled housing market and imports.

EEF said investment would also make a greater contribution to economic growth this year and next than in recent years.

Small and medium-sized manufacturers, partly helped by easier access to credit and greater demand for their goods, led the jump in investment intentions.

“While the signs of (economic) recovery that have emerged so far this year are positive, the need for better-balanced growth from net trade and investment remains a necessity,” said Lee Hopley, chief economist at EEF.

“As companies become more confident about their growth prospects, we need to see this translate into commitments to invest in new capacity, and for this to take place in the UK.”

The survey was conducted between July 31 and August 21, with 290 companies responding.

Reporting by Olesya Dmitracova; Editing by Toby Chopra

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