New Insights on Regional Capital Investment in the UK, 1997 to 2019

Recent work by the Office for National Statistics (ONS) as part of their subnational statistics development programme has developed new estimates of regional capital investment, with asset breakdowns for the first time, as well as detailed geographic and industrial breakdowns, a longer time series, and improved methods. We use this Subnational Development dataset to establish new insights about the geography of capital investment in the UK between 1997 and 2019. We provide a range of descriptive analyses of these estimates, correlations and comparisons with other macroeconomic variables (including productivity), and a comparison of the Subnational Development dataset with previous estimates of regional capital investment from the Regional Accounts. One contribution is to develop region-specific deflators for capital investment, not present with the ONS datasets, such that we can explore the real growth of investment over time. We find that more productive regions tend to invest relatively more in intangible assets, and that these patterns are persistent over time.