UK Business Investment Drops Almost 21 Percent from 2008

Business investment has plunged over the last year in the UK, according to the Office for National Statistics, as the final quarter it dropped by another 5.8 percent to finish the year down 20.8 percent from 2008.

In comparison to the fourth quarter of 2008, the 5.8 percent drop in business investment ended the year down 24.1 percent year over year.

Even worse was the data for economic growth for Britain, which grew at an anemic pace of 0.1 percent for the quarter, far below expectations of analysts.

This continues to show that the reports we've gone past the recession into recovery are based on hopes and dreams and not reality. Most reports coming out around the world show not only challenges ahead, but that all the wasted tax dollars on so-called stimulus programs have largely failed. Governments can't create jobs and can't jump start the economy, only businesses can; the reason we're still in the situation we're in today.

What this means for the UK of course is businesses, the ones who are on the ground and actually know what's happening are saying through these actions, or lack of actions, that there have no illusions that there is an economic recovery, or that we're in one, and they consequently are holding back on investing until demand begins to pick up again for products and services.

Business and economics aren't rocket science. It's based on supply and demand. If there's demand out there, businesses will invest what's needed to ensure that it's met. If there is no demand, it doesn't matter how much they invest, they can't create something from nothing if consumers don't want it or aren't willing to pay for it.

There is nothing more to the UK business investment story than that. There is no recovery at this time, as a recovery, when it is real and sustainable, will be based on demand and nothing else.

Governments throwing money at problems and going further into debt can't create demand or a market for products or services by doing that, only consumers and businesses getting together can do that.

This is just another confirmation that we're a long way from real economic activity picking up, and business investment is one of the best indicators there is to confirm that reality.