By Daniel Hunter

The majority of businesses are planning to slow their investment growth, according to research by ICAEW.

All industries bar business services said they expect to see growth slow. But the study also showed that businesses have for the last year predicted less than they actually invested, suggesting that companies have been prone to making short-term decisions.

The survey revealed most businesses expect to slow their capital investment over the next 12 months, compared with the previous year:

· Transport and Storage — +1.6% (down from +3.8%)· Property - +2.5% (down from +3.7%)· Construction - +0.7% (down from +3.6%)· Manufacturing and Engineering - +1.5% (down from +3.5%)· Retail - +1.9% (down from +3.4%)· Banking, Finance and Insurance - +1.7% (down from +3.2%)· IT & Communications - +1.9% (down from +2.3%· Business Services sees the only prospective increase - +2.1% (up from +1.9%)

However, businesses have consistently underplayed their investment intentions, suggesting that they often make snap decisions about when to invest:

· In Q3 2013, businesses said capital investment would grow by 1.6% over the next year — it instead rose by 3.3%· In Q4 2013, they expected growth of 2.2% - it increased by 3.2%· In Q1 2014, expected growth of 2.3% is compared with actual growth of 3.3%· Q2 2014 saw anticipated growth of 2.3%, but a year later investment growth was reported as 2.9%

Stephen Ibbotson, ICAEW Director of Business, said: “The research demonstrates that businesses are more conservative when it comes to their medium-term investment plans. Over the last two years this has been no surprise — we’ve had the uncertainty of a General Election, and the problems with the eurozone. However companies are dynamic and are clearly making the most of any short-term opportunities that arise.

“The government has made productivity growth a key part of the economy, and it is contingent on turbo-charging our spending on plant and machinery, and upskilling our workforce. However at the last Budget the government set the Annual Investment Allowance at just £200,000, far lower than businesses have been used to. The government needs to ensure that our fast-growing firms can expand and drive the economy forward. Increasing the Allowance, and providing export tax credits would be a good start.”