Procurement professionals report increased capital expenditure

21 October 2014

Company spending on capital expenditure has increased in the last year, according to almost two-thirds of procurement professionals responding to a survey.

Sixty two per cent of procurement managers in 280 mid-tier UK businesses across industry sectors surveyed by Office Depot reported an increase in business investment. Of these, one in ten said they had spent between 50 and 10 per cent more than in the previous year.

In what appears to be a sign that businesses are willing to invest in growth, 73 per cent of respondents said they are expecting capital expenditure to increase in the coming year.

Nigel Crunden, marketing manager at Office Depot, said that now is a really interesting time to take a snapshot of procurement dynamics across a range of sectors because, despite the impact of the economic downturn on confidence, spending on purchases that can improve operational results or increase production capacity seems to be rising.

“However, there is some evidence of caution when making purchasing decisions and the majority of procurement managers tell us they are more influenced by price than quality, although one in three (30%) consider both to be equally important,” he added.

“While an increase in business investment across industry sectors is clearly apparent from this study, there is still a firm focus on getting as much return on investment as possible. Suppliers can help to meet this challenge by fully ingraining themselves in their customers’ business culture and designing product and service offerings that meet their needs. Customers can do their bit too by streamlining ordering and billing processes.”

The research also found that 84 per cent of respondents conduct in-depth online research into the quality and reputation of a supplier before placing an order. This was most evident in the construction sector, where 91 per cent of respondents said this was an integral part of supplier selection, compared to 83 per cent of manufacturing firms and 56 per cent of other public sector departments.

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