Bug fears boost IT spend

FEAR OF the impact that a millennium bug computer crash could have on their business has driven companies to channel three-quarters of capital investment into IT equipment, a report says today.

Spending to eliminate the threat of computer problems associated with the move into the year 2000 is the primary reason for the continued growth in capital investment, Barclays Bank said. More than four out of 10 businesses plan to increase capital investment, the same figure as at the start of the year. Of these, almost three quarters (74 per cent) are planning to increase capital investment.

Robert East, director of Barclays Corporate Services, said: "With three quarters of businesses saying investment was going into IT equipment there would appear to be an obvious link to the millennium."

The bank's quarterly business trends survey found 60 per cent of the 600 finance directors were more optimistic about the future, compared with 49 per cent at the beginning of the year. But the rise in confidence for their own business was more modest, up from 59 per cent to 63 per cent.