Panel members continued to report that their recent investment growth has been subdued. In the May to July surveys, nominal investment was estimated to have grown by an average of around 1% over the year to 2019 Q1, which was close to both the average growth rate of the previous year reported in the survey and the average over the three years since the EU referendum. Research using data from the DMP, see Bloom et al (2019) for details, has estimated that the Brexit process has reduced the level of UK investment by around 11%, relative to what might otherwise have happened, over the three years since the referendum.
Looking ahead, businesses expected nominal investment growth to pick up a little to around 3% over the year to 2020 Q1 (based on the May to July surveys). Again, this was similar to the average expected growth rate over the period since the DMP has been running, although average expected investment growth has typically been a little higher than subsequent realised growth. The Brexit process is likely to be influencing future investment plans and businesses continued to report that this would hold back their investment decisions over the next year. Between May and July, they reported a 30% chance, on average, of Brexit having a negative impact on investment over the next year, compared with a 9% chance of a positive effect (Chart D). These probabilities were similar to when the question was last asked six months earlier.