Data released by specialist tax relief consultancy Catax has revealed that during the second quarter of this year, business investment in the mining and quarrying has collapsed by 46.2% due to the Covid-19 pandemic.
During the quarter, total business investment in the mining and the quarrying sectors declined to £1.4bn, which represented a fall from £2.6bn in the second quarter of last year, latest Office for National Statistics (ONS) figures revealed.
This decline was more pronounced compared to the fall that was seen in the wider economy.
Catax CEO Mark Tighe said: “The second quarter was when the pandemic really saw economies slamming on the brakes, with the national lockdown in the UK being announced on March 23, just before it began.
“The mining sector fared much worse than UK industry as a whole, with only the utilities and hospitality sectors performing worse with falls in business investment of more than half.”
Across UK industry, overall business investment edged down 26.1% in the quarter compared with the same quarter the previous year.
GDP in the country declined 20.4%. All main sectors of the economy also witnessed widespread declines.
However, the picture has improved recently with the ONS reporting that GDP increased 8% in the three months to the end of August after measures related to the Covid-19 lockdown were eased.
This raised hopes of a steep recovery in investment.
Tighe further added: “It will take some time for investment to climb back to where it was at the start of the year, when the only threat on the horizon appeared to be Brexit negotiations. The speed of that recovery will depend very much on how long the second wave lasts and what disruption is to come.”