The lack of liquidity and available bank credit has not stymied the majority of FDs from maintaining or increasing their capital expenditure. More than half (54%) plan to boost or keep static their capital expenditure, which marks a major turnaround from six months ago when 63% of respondents planned to halt or revise growth plans. Further, the majority of businesses expected to see their businesses expand either organically or by taking advantage of the unique acquisition opportunities created by the recession.

However, where businesses intend to reduce expenditure, the cuts are significant. Of those planning to reduce investment in capital expenditure, 43% planned cuts of 20% or more.

  View our graph: Capital expenditure over next 12 months compared to previous 12

Looking at business sectors, the manufacturing and retail industries were most likely to slash expenditure, while 67% of respondents in the property and related services sector plan to increase levels of capital investment over the next 12 months.

In the main, businesses were optimistic about future growth prospects although 22% of businesses surveyed were looking to dispose of or otherwise exit part of their business over the next 12 months.

• 59% of businesses surveyed expected to grow organically while 26% expected to grow through acquisitions;
• Nearly one-third (30%) of FDs thought their firms would branch out into new geographies, while 39% were considering new products.

"The fact that over a quarter of businesses are looking to make a significant step such as an acquisition demonstrates that the growth instinct is alive and well and entrepreneurs recognise there is a once in a generation opportunity. We still see opportunities for both Buyer and Seller in this market."
Rob Donaldson, Partner and Head of M&A, Baker Tilly