Growth in Bank Lending to US Businesses Since the Credit Crunch just Over Half World Average, Hampering Return to Economic Growth

Bank lending to the private sector in the US is just 14 percent higher in the last year than it was before the financial crisis – compared to a global average of 24 percent – hampering the return to economic growth, reveals a new study by UHY, the international accounting and consultancy network.

According to UHY, in 2016 a total of $9.6 trillion was lent to businesses in the US – down from $8.4 trillion in 2008.

By contrast, on average across all the 24 countries studied around the world, private sector bank lending increased by 24 percent over the same period in absolute terms.

European economies generally are among the worst affected. Private sector bank lending was on average 25 percent lower last year than pre-credit crunch across the European countries studied, with a total of $12.2 trillion lent to those businesses in 2016 – down from $16.3 trillion in 2008.

UHY says that countries like Spain and Ireland which were hardest hit by the banking crisis are seeing the slowest recovery in private sector credit.

Bank lending to the private sector in Ireland is 69 percent below 2008 levels ($148 billion in 2016, down from $475 billion), while in Spain, it is 51 percent lower ($1.3 trillion down from $2.7 trillion).

Even in Germany, widely seen as the economic powerhouse of Europe, there was a 21 percent decrease, falling to $2.6 trillion last year from $3.3 trillion in 2008.

Eric Hananel, of UHY’s US member firm UHY Advisors, comments: “Almost a decade on from the global financial crisis, many US small and medium-sized businesses are still suffering from a shortage of credit.”

“As regulators have forced banks to shore up their balance sheets and reduce risk, many SMEs have found their access to lending severely curtailed. While some larger companies may have been able to get around this by accessing the bond market, smaller businesses are unlikely to have that option.”

“Without the capital expenditure they need to fund investment, businesses will struggle to capitalise on growth opportunities or drive innovation, ultimately risking losing ground to global competitors.”

“The US Government is increasingly looking to boost lending. As an incentive to accelerate business growth, as well as incrementally increase the amount of business borrowing, current efforts are underway to adjust the Foreign Tax Scheme to allow for the repatriation of foreign cash balances back to the US.”

G7 economies lag well behind BRICs
UHY adds that the G7 group of leading world economies is also lagging behind – while BRICs economies power ahead. On average, the G7 saw a 1 percent decrease in real terms over the period, whereas BRICs (Brazil, Russia, India, China) enjoyed an average increase of 209 percent.

China topped the UHY table, with bank lending to the private sector jumping 270 percent between 2008 and 2016.

Eric Hananel says, “It’s debateable whether the appetite to lend to BRICs and other emerging economies is sustainable, as debt levels increase while economic growth slows in countries like China. Scrutiny of companies’ ability to service their borrowing will be increasingly intense.”

“What’s more, if interest rates – particularly in the US – were to rise that could put the brakes on lending to both developed and emerging economies, as companies think twice about taking on more expensive borrowing.”

Amount of Bank lending to the private sector in USD

Country Bank lending to the private sector 2008 ($ billions) Bank lending to the private sector 2016 ($ billions) % Change from 2008-2016
China $4,570 $16,890 270.0%
BRIC $6,460 $19,940 208.9%
India $590 $1,100 97.7%
Brazil $690 $1,180 71.1%
Malaysia $240 $390 65.0%
Argentina $40 $60 54.9%
Canada $70 $1,710 45.5%
Mexico $120 $180 44.8%
Israel $140 $200 43.6%
Australia $1,250 $1,790 42.5%
New Zealand $200 $270 37.6%
World $39,520 $51,360 23.9%
Poland $220 $250 14.8%
Russia $610 $700 14.6%
US $8,380 $9,560 14.0%
Japan $5,240 $5,240 0.2%
G7 $25,540 $25,280 -1.0%
France $2,570 $2,300 -10.6%
Belgium $340 $290 -14.0%
Netherlands $1,060 $860 -19.2%
UK $2,870 $2,290 -20.3%
Italy $1,970 $1,560 -21.0%
Germany $3,330 $2,620 -21.4%
Denmark $670 $520 -21.6%
Europe $16,280 $12,220 -24.9%
Romania $70 $50 -26.3%
Spain $2,710 $1,340 -50.6%
Ireland $480 $150 -68.9%

Bank lending to the private sector as a percentage of GDP

Country % Change from 2008-2016
China 50.5%
Brazil 46.2%
Canada 45.1%
Russia 40.9%
BRIC 38.9%
Mexico 31.8%
Malaysia 30.2%
Poland 28.1%
Australia 14.7%
India 9.9%
Argentina 9.3%
France 8.8%
Japan 6.8%
Italy 4.8%
New Zealand 0.7%
Netherlands 0.2%
Belgium -1.6%
Israel -1.9%
World -3.5%
Denmark -7.5%
US -8.8%
UK -10.3%
Germany -12.1%
G7 -14.6%
Europe -16.9%
Romania -23.7%
Spain -32.5%
Ireland -69.1%


About UHY LLP
UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors.” UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP and UHY Advisors, Inc. are US members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. Any services described herein are provided by UHY LLP and/or UHY Advisors (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.

About UHY, the network
Established in 1986 and based in London, UK, UHY is a network of independent audit, accounting, tax and consulting firms with offices in over 296 major business centers across more than 90 countries. Our staff members, over 7,660 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to www.uhy.com.

UHY press contact: Dominique Maeremans on +44 20 7767 2621 Email: d.maeremans@uhy.com.

UHY is a full member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit www.forumoffirms.org.

UHY is an international association of independent accounting and consultancy firms, whose organizing body is Urbach Hacker Young International Limited, a UK company. Each member of UHY is a separate and independent firm. Services to clients are provided by the UHY member firms and not by Urbach Hacker Young International Limited. Neither Urbach Hacker Young International Limited nor any member of UHY has any liability for services provided by other members.

UHY LLP CPAs Expand Michigan Footprint with Ann Arbor Office

UHY LLP, certified public accountants, with 380 employees in Oakland and Macomb counties, is opening its fourth Michigan office in Ann Arbor. UHY’s first Washtenaw County office will be open for business in a newly renovated suite on East Eisenhower Parkway just minutes away from University of Michigan’s main campus and the Big House.

“Being in Ann Arbor will help us recruit and retain top young talent which will ultimately lead to sustainable growth for our firm for years to come”, said Tom Callan CEO of UHY Advisors MI, Inc. and managing partner of UHY LLP. “The move comes three years after opening our Detroit office and on the heels of the Michigan practice’s 50th anniversary (in 2018), marking another milestone in the development of our firm”.

Jerry Grady, office managing partner of the new Ann Arbor office adds: “We’ve been wanting to do this for quite a while. The time is right, our location is ideal, and our whole team is excited for this new venture. Having a presence in Ann Arbor will allow us to enhance our service capabilities even further and better serve our clients in surrounding areas like Brighton, Chelsea, Dexter, Howell, Jackson, Kalamazoo, Lansing, Saline and Toledo.”

“Ann Arbor is a great choice for our firm,” said Tony Frabotta, CEO of UHY Advisors, Inc., the fourth largest firm in the Great Lakes region. “The opening of the Ann Arbor office carries the tradition of continued growth and will be the fourth office in the country opened this year.”


About UHY LLP
UHY LLP, a licensed CPA firm, provides audit and other attest services to publicly traded, privately owned and nonprofit organizations in a number of industry sectors. UHY Advisors provides tax and advisory services to entrepreneurial and other organizations, principally those enterprises in the dynamic middle market.

UHY LLP, operating in an alternative practice structure with UHY Advisors, forms one of the largest professional services firms in the US. While that scale might provide confidence for some clients, others tell us our greatest value is the way we bring these resources to bear to help address today’s evolving business challenges. It’s a philosophy we call “The Next Level of Service”. To learn more visit www.uhy-us.com.

All of the above entities are members of UHY International (“UHYI”), a worldwide network of independent professional services firms that provide audit, tax and advisory services around the globe. UHYI is ranked among the top international accountancy networks and a proud member in good standing of the Forum of Firms. Collectively, our US operating entities (UHY LLP and UHY Advisors) are the largest independent members of UHYI with significant participation, bringing the power of our international network to serve the individualized needs of our clients.

Donna Frye Joins UHY Advisors

UHY Advisors, one of the nation’s leading professional services firms, welcomes Donna Frye as director of transfer pricing and the newest addition to the international tax services practice.

Frye is a seasoned professional with over 16 years of transfer pricing knowledge including international tax and transfer pricing compliance, planning and controversy services.

As director of transfer pricing, Frye will work as part of the international tax services practice assisting with transfer pricing planning, benchmark analysis, implementation, BEPS issues, documentation and controversial work with respect to transfer pricing.

Frye has over 16 years of transfer pricing knowledge, including Big 4 accounting experience and Big 3 automotive experience. She is a licensed CPA in the state of Michigan and double alumni of Walsh College.


About UHY Advisors
UHY Advisors, Inc. (“UHY Advisors”) operates in an alternative practice structure with UHY LLP, a licensed CPA firm, collectively forming one of the top professional services firms in the country, providing comprehensive audit, attest, tax and business advisory services to a wide range of clients principally in the dynamic middle market. To learn more visit www.uhy-us.com. UHY LLP and UHY Advisors are US members of UHY International (“UHYI”), a network of independent accounting and consulting firms. UHYI is ranked among the top international accountancy networks and a full member of the Forum of Firms.

UHY LLP’s Josh Kirkbride Joins P.C.U.P.S Board

Josh Kirkbride, partner of UHY LLP certified public accountants, and longtime supporter of the P.C.U.P.S (Prostate Cancer Understanding Prevention Screenings) Foundation has been voted in as its newest board member.

P.C.U.P.S was created in 2011 by Tom Albrecht as a tribute to his father to raise money and create a higher awareness in the fight against cancer. Since March 2012, the foundation has raised over $125,000 and has paid for over 1,500 PSA screenings. P.C.U.P.S. continues to promote awareness through sports and recreation, and has been awarded the Crystal Silver Lining Award by the Sanilac County Community Foundation in 2013 and 2014. The P.C.U.P.S. Foundation was recognized as a 501c3 on November 1st, 2013.

Kirkbride, from Sandusky, Michigan, is involved in many other community organizations such as Sons of American Legions and Knights of Columbus. He is also a former board member and treasurer for the Michigan Lupus Foundation.


About UHY LLP
UHY LLP, a licensed CPA firm, operates in an alternative practice structure with UHY Advisors, Inc., collectively forming one of the top professional services firms in the country, providing comprehensive audit, attest, tax and business advisory services to a wide range of clients principally in the dynamic middle market. To learn more visit www.uhy-us.com. UHY LLP and UHY Advisors, Inc. are US members of UHY International (“UHYI”), a network of independent accounting and consulting firms. UHYI is ranked among the top international accountancy networks and a full member of the Forum of Firms.

Over 100 Future UHY CPAs Give Back to the Community

UHY LLP (“UHY”), one of the nation’s fastest growing accounting firms, just finished up it’s summer recruiting and leadership program, UHY Connect, where over one hundred accounting students were given a glimpse inside UHY offices across the country. The program allows potential recruits to get a feel for the firm’s culture and working environment, and make connections with partners, accounting staff and others prior to graduating and choosing their career path.

An important aspect of the program is the charitable component. Connect participants partake in a community service project with one of the firm’s nonprofit clients or affiliates. UHY has a long history of supporting their client’s missions and community goals. They place great emphasis on community outreach from each recruit’s first connection with UHY because corporate social responsibility is a high priority at all levels within the firm. Activities ranged from sorting nearly 8,000 pounds of food at a Michigan food bank to a campus cleanup project in New York.

“Each year we host UHY Connect to allow college accounting students to take a deeper look at our firm and learn all they can about its people, culture and environment. Students work together on a community service project, and participate in panel discussions and a social team building activity,” said recruiting manager, Rina Henning. “We believe it is important to potential recruits to see our commitment to the communities we serve.”

About UHY LLP

UHY LLP, a licensed CPA firm, provides audit and other attest services to publicly traded, privately owned and nonprofit organizations in a number of industry sectors. UHY Advisors provides tax and advisory services to entrepreneurial and other organizations, principally those enterprises in the dynamic middle market.

UHY LLP, operating in an alternative practice structure with UHY Advisors, forms one of the largest professional services firms in the US. While that scale might provide confidence for some clients, others tell us our greatest value is the way we bring these resources to bear to help address today’s evolving business challenges. It’s a philosophy we call “The Next Level of Service”. To learn more visit www.uhy-us.com.

All of the above entities are members of UHY International (“UHYI”), a worldwide network of independent professional services firms that provide audit, tax and advisory services around the globe. UHYI is ranked among the top international accountancy networks and a proud member in good standing of the Forum of Firms. Collectively, our US operating entities (UHY LLP and UHY Advisors) are the largest independent members of UHYI with significant participation, bringing the power of our international network to serve the individualized needs of our clients.

UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors.” UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP and UHY Advisors, Inc. are US members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. Any services described herein are provided by UHY LLP and/or UHY Advisors (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.

US Consumers Pay Customs Duties One Third of Global Average, Finds UHY Study

Consumers in the US benefit from customs duty rates of nearly a third lower than the global average, saving them significant amounts of money, according to a new study by UHY, the international accounting and consultancy network.

UHY found that customs duties in the US are, on average, just 1.3% of the total value of imported goods. The global average is 1.8 percent of the total value of imported goods*.

This means that consumers in the US typically pay comparatively lower prices for goods than consumers in many other parts of the world – including many emerging economies – where costs are pushed up by higher import taxes.

UHY studied customs duties levied by 22 major economies around the world as a percentage of the total value of their imports, as a simple indicator of the impact of a country’s trade barriers.

UHY points out that many regional trade blocs – and in particular NAFTA and the EU – help to keep import tariffs low. Other multi-lateral trade agreements are also under pressure.

For example, the US has signalled it wants to renegotiate the North American Free Trade Agreement (NAFTA) and has abandoned the Trans Pacific Partnership (TPP), throwing the future of both into doubt.

Eric Hananel, of UHY’s US member firm UHY Advisors, comments: “The US’s consumers are enjoying comparatively low goods costs thanks to a light customs duty burden – something the government should be keen to protect.”

“That can be increasingly challenging as globalization comes up against growing protectionism on the part of some other global economies.”

“Maintaining lower import tariffs could actually protect home-grown industries, by adding extra impetus to efforts to stimulate competitiveness and drive innovation. By contrast higher tariffs can significantly distort economies.”

Hananel adds: “Free Trade Agreements are becoming an increasing critical – as well as contentious – policy area.”

“As protectionist moves on the part of some governments are putting some Free Trade Agreements under review, other countries are embracing them with as much enthusiasm as ever, if not more.”

The US is party to 14 reciprocal free trade agreements with 20 countries including Australia, Israel, and South Korea. Additionally, the US has over 250 Foreign-Trade Zones (FTZ) which are equivalent to international free-trade zones, and they are located in all 50 states. Items transported to these zones are exempt from customs duties and can be stored, assembled, used in manufacturing or assembly.

In the US, where protectionism has been rising up the political agenda, raising the possibility that higher import duties may be levied, customs duties are currently worth just 1.3% of the value of imported goods. This compares to 1.8% in China.

Eric Hananel continues: “President Trump is a strong advocate of protectionism and made international trade agreements an election campaign issue. He has softened his stance on NAFTA and has indicated that he will look to renegotiate the deal instead of outright withdrawal.”

In the UK, where Brexit is also creating uncertainty over the future of UK trade deals, customs duties are currently just 0.5% of the value of imports.

European countries generally impose comparatively low rates – the European average is 0.4% – so British consumers could be at a significant disadvantage if the UK fails to keep duties at a similar level on leaving the EU.

Bangladesh has the highest customs duties as a proportion of total imports of any country in the study at 12.1%.

Amount of customs duties collected as a percentage of the value of total imports

Country Customs duties
collected (USD billion) Value of
total imports
(USD billion) Customs duties
collected as %
of total imports
Bangladesh $5.48 $45.33 12.1%
Israel $0.79 $8.29 9.5%
Mexico $35.49 $427.63 8.3%
The Philippines $7.40 $90.12 8.2%
Brazil $18.59 $243.12 7.6%
Pakistan $3.33 $47.53 7.0%
India $32.58 $491.88 6.6%
Russia $8.48 $182.40** 4.7%
Argentina $2.67 $75.02 3.6%
BRICs $24.19 $740.51 3.3%
Nigeria $2.25 $73.46 3.1%
China $37.11 $2,044.65 1.8%
World $10.13 $562.97 1.8%
United States $34.98 $2,761.52 1.3%
Japan $9.50 $803.57 1.2%
G7 $8.92 $1,072.41 0.8%
Canada $4.11 $528.09 0.8%
Netherlands $3.39 $537.84 0.6%
Spain $1.92 $366.62 0.5%
Croatia $0.12 $23.00 0.5%
Italy $2.37 $491.40 0.5%
United Kingdom $3.86 $836.19 0.5%
Europe $2.50 $570.34 0.4%
Germany $5.47 $1,316.88 0.4%
Poland $0.73 $221.54 0.3%
France $2.13 $769.22 0.3%

*Based on World Bank data – 2015, most recent available year
**Russian Federation Federal Statistics Service, 2015

# # #
About UHY LLP
UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors.” UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP and UHY Advisors, Inc. are US members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. Any services described herein are provided by UHY LLP and/or UHY Advisors (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.

About UHY, the network
Established in 1986 and based in London, UK, UHY is a network of independent audit, accounting, tax and consulting firms with offices in over 296 major business centers across more than 90 countries. Our staff members, over 7,660 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to www.uhy.com.

UHY press contact: Dominique Maeremans on +44 20 7767 2621 Email: d.maeremans@uhy.com.

UHY is a full member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit www.forumoffirms.org.

UHY is an international association of independent accounting and consultancy firms, whose organizing body is Urbach Hacker Young International Limited, a UK company. Each member of UHY is a separate and independent firm. Services to clients are provided by the UHY member firms and not by Urbach Hacker Young International Limited. Neither Urbach Hacker Young International Limited nor any member of UHY has any liability for services provided by other members.

Clayton & McKervey shareholder explains the 5 most common mistakes small to mid-sized business make with GAAP – and how they can impact the purchase price when a company goes for sale

Kevin Johns, a shareholder in the Small and Mid-sized Entities practice at Clayton & McKervey, an international certified public accounting and business advisory firm located in metro Detroit, says his work with new small to mid-sized businesses have a common theme when it comes to Generally Accepted Accounting Principles (GAAP) mistakes. GAAP, the most common accounting framework for the preparation of financial statements in the U.S., provides a standard set of rules in order for readers to properly understand and interpret financial results, and serves other purposes as well.

“GAAP is also the most common framework used when composing contract language for mergers and acquisitions; errors and omissions in applying GAAP can be costly in such business transactions,” Johns said. “They can impact credibility with lenders and lead to incorrect decision-making.”

GAAP violations can also cause inaccurate reporting for internal and budgeting purposes, as well as a reduced reliance on prepared financial statements for third party readers.

“The ripple effect of damaged credibility due to GAAP errors can have an additional negative impact on the purchase price when a business is put up for sale,” Johns said.

Johns offered a list of the five most common GAAP violations that he and his Clayton McKervey colleagues routinely uncover when working with a new client.

  1. Escalating Rent
    Lessors often offer financial incentives to solicit a lessee into entering a rental contract, such as “free rent” at either the beginning or end of the lease arrangement. GAAP accounting requires that lessees divide the total rent payments over the lease term by the number of months in the lease to calculate monthly rent expense unless a more rational basis is found. Any difference between payments and expenses is classified as either a current or non-current asset or liability on the balance sheet.
  2. Depreciation
    Over the past decade, the tax code has allowed for accelerated depreciations methods and bonus depreciation. These accelerated tax methods of depreciation do not comply with GAAP reporting rules, as outlined in FASB ASC Topic 740. In addition to accelerated depreciation, structural building improvements made to leased property would normally be depreciated over 39 years for tax purposes; however, GAAP stipulates that these improvements should be depreciated over the shorter of their useful life or the lease term, including renewable options that are expected to be exercised. It is common for businesses to incorrectly default to using the tax method of 39 years of depreciation for GAAP reporting for leasehold improvements.
  3. Capitalization of Overhead Costs
    Many times only direct costs, such as labor and raw materials, are used to value the production of inventory, and overhead is typically either not associated or applied incorrectly to the basis of the value of inventory. By not applying overhead calculations, large inventory valuation errors can occur on the balance sheet, and with related cost of goods sold on the income statement.
  4. Accrued Vacation/PTO
    Vacation or Paid-Time-Off (PTO) policies often incorporate a “use it or lose it” rule whereby employees lose the unused portion of their vacation. However, there are many companies that will pay cash for unused vacation time. A formal plan in a human resource handbook does not by itself dictate a potential employer liability. Instead, a verbal and accepted policy is enough to trigger an employee’s potential right to compensation of vacation or PTO that has not yet been accrued. Depending on the length of employee tenure and vacation/PTO time awarded, the liability associated with these policies can be significant. The impact is even more pronounced when a business is for sale and the buyer factors this liability into the required working capital target, as well as the computing enterprise value, as a multiple of earnings.
  5. Uncertain Tax Positions
    FASB ASC Topic 740 established a threshold condition where a tax position taken in a previously filed tax return, or to be taken on future tax returns, be recognized currently in the financial statements. Uncertain tax positions must be recognized under a two-step process:
  • A “more likely than not” (more than 50%) approach that a tax position will be sustained under an IRS audit.
  • The tax position is measured at the largest amount of tax benefit/expense that is greater than 50% likely.

The ability and ease to reach new markets outside of the businesses state of residence continues to propel businesses into new markets. Depending upon the nature and duration of the activity conducted outside of their home state, businesses could face an income tax liability in these states. If the company does not register to do business and does not register to file tax returns in these states, they would not preclude the GAAP financial statements from accruing the tax liability and disclosing it on the financial statements.
To read about additional common tax uncertainties that need analysis, as well as the Framework for Small and Medium Sized Entities (FRF for SMEs) as a potential non-GAAP reporting option, visit the Clayton & McKervey website.

About Clayton & McKervey
Clayton & McKervey is a full-service CPA firm helping middle-market entrepreneurial companies compete in the global marketplace. The firm is headquartered in metro Detroit and services clients throughout the world. To learn more, visit claytonmckervey.com.

US Powers Ahead in Capital Investment, Strengthening Future Growth Prospects

The US is powering ahead of the world average in terms of capital investment in its economy’s business resources and public infrastructure, strengthening its future growth prospects, reveals a new study by UHY, the international accounting and consultancy network.

According to UHY, the US has seen capital investment increase by 33% over the last five years* to $3.7 trillion in 2015 (latest figures available), which equates to 20% of its GDP in 2015. The US increase compares favorably against both the global average, which has risen by 21.1% over the same period, and the G7, which has seen a 11% increase.

UHY says higher capital investment levels are an indicator that businesses are positioning themselves to expand capacity, to improve productivity, or to move into new markets by opening new sites. They also reflect governments’ support for growth by improving the transport links, more efficient power generation capacity and other vital infrastructure that businesses rely on.

The UHY study looked at “gross capital formation” – or capital investment – in 41 major economies around the world, measuring trends over a five-year period, and comparing investment levels to a nation’s Gross Domestic Product (GDP).

Gross capital formation measures spending on assets such as IT systems, new equipment and machinery, and investments in infrastructure projects by governments. The UHY study compares it to GDP in order to put it into context against the size of a country’s economy.

UHY says that since the 2016 Presidential election, President Donald Trump has indicated he plans to allocate even more resources to improving the country’s infrastructure.

UHY says that maintaining a high level of investment in infrastructure is critical, as the US Department of Transportation estimates that more than two thirds of roads in the US are in “less than good condition,” and that nearly 150,000 bridges need repair.

By contrast, European countries on average have seen capital investment decrease by 5.5%.

The G7 is also seeing a slower rate of increase than the global average, raising capital investment by an average of 11.1% over a five-year period. However, the average amount invested by G7 economies is still substantial – at over $1 trillion in 2015 (or 20.7% of GDP).

At the top of the table, China has increased capital investment by 73% to $5 trillion – equivalent to 45% of its GDP. UHY says that China’s extremely high levels of investment in recent years have helped underpin its long run of robust growth, which remains comparatively high, at 6.9% in 2015**.

Alongside a wide range of major public infrastructure projects helping improve productivity and competitiveness, businesses in China have been rapidly expanding capacity and investing in innovation to strengthen their position in the global marketplace.

Comments Dennis Petri, Managing Director at UHY Advisors: “Capital investment is vital in paving the way for economic growth, and the US is actively taking steps to stay ahead.”

“The US is outpacing a range of both developed and emerging economies. While in many developed economies, businesses’ and governments’ ability to invest was hit by recession, activity in the US has remained far more robust.”

“Companies in the US have positioned themselves for growth by allocating more capital to investment projects as they sharpen their competitive edge.”

“It’s critical that the government continues to pro-actively support business investment, especially by enacting measures to help small businesses, such as grants for start-ups or tax breaks for R&D or capex.”

“The US Department of Transportation has had its own say on the state of American infrastructure, so it is important that the government maintains its commitment to spend on its infrastructure, while also providing incentives for businesses to do the same.”

Table 1: Gross Capital Formation – change since 2010

Rank Country 2015 GCF
(USD billion) % change
since 2010
1 Bangladesh $56.4 86.2%
2 China $5,027.2 73.1%
3 Rep. of Ireland $61.4 60.4%
4 Pakistan $42.0 49.6%
5 Zambia $9.1 49.5%
6 Guatemala $8.6 48.7%
7 Philippines $60.1 46.6%
– BRIC average $1,574.0 42.9%
8 Israel $59.7 38.1%
9 Uruguay $10.6 35.5%
10 USA $3,670.0 33.3%
11 UAE $101.7 29.9%
12 Peru $45.4 29.6%
13 UK $502.7 29.5%
14 Vietnam $53.6 29.5%
15 Argentina $98.3 25.9%
16 Malaysia $74.3 24.6%
– ASEAN average $74.5 22.1%
– World average $364.2 21.1%
17 Indonesia $297.9 20.0%
18 Malta $2.4 17.5%
19 Singapore $77.0 16.8%
20 Nigeria $74.5 16.8%
21 Australia $356.0 13.1%
22 Mexico $260.0 12.1%
23 Egypt $47.5 11.4%
– G7 average $1,012.1 11.1%
24 Thailand $95.3 10.2%
25 Germany $599.8 3.3%
26 Romania $45.5 1.0%
27 India $678.2 0.7%
28 Denmark $57.8 -1.9%
29 Canada $366.4 -3.5%
30 Belgium $105.6 -3.7%
31 Poland $97.5 -4.5%
– Europe average $187.0 -5.5%
32 France $540.9 -6.7%
33 Czech Republic $50.7 -10.0%
34 Japan $1,047.9 -13.7%
35 Netherlands $144.6 -15.3%
36 Russia $276.1 -19.9%
37 Spain $247.7 -26.5%
38 Italy $309.5 -29.1%
39 Croatia $8.9 -30.1%
40 Brazil $314.3 -34.7%
41 Portugal $30.3 -39.8%

Table 2: Gross Capital Formation – as a percentage of Gross Domestic Product (GDP)

Rank Country 2015 GCF
(USD billion) % of GDP
1 China $5,027.2 45.0%
2 Zambia $9.1 41.3%
– BRIC average $1,574.0 38.5%
3 Indonesia $297.9 34.7%
4 India $678.2 32.7%
5 Australia $356.0 29.1%
– ASEAN average $74.5 28.3%
6 Vietnam $53.6 28.0%
7 UAE $101.7 27.5%
8 Czech Republic $50.7 27.4%
9 Bangladesh $56.4 27.3%
10 Singapore $77.0 26.3%
– World average $364.2 25.7%
11 Romania $45.5 25.6%
12 Japan $1,047.9 25.4%
13 Malaysia $74.3 25.1%
14 Malta $2.4 24.9%
15 Thailand $95.3 24.1%
16 Peru $45.4 23.6%
17 Canada $366.4 23.6%
18 Belgium $105.6 23.3%
19 Mexico $260.0 22.7%
20 France $540.9 22.4%
21 Rep. of Ireland $61.4 21.7%
22 Russia $276.1 20.8%
– G7 average $1,005.3 20.7%
23 Philippines $60.1 20.6%
24 Poland $97.5 20.5%
25 USA $3,670.0 20.3%
26 Israel $59.7 19.9%
27 Uruguay $10.6 19.9%
28 Denmark $57.8 19.6%
29 Netherlands $144.6 19.5%
– Europe average $187.0 19.3%
30 Germany $599.8 18.8%
31 Croatia $8.9 18.2%
32 Spain $247.7 17.9%
33 Brazil $314.3 17.7%
34 UK $502.7 17.6%
35 Italy $309.5 17.0%
36 Argentina $98.3 15.6%
37 Pakistan $42.0 15.5%
38 Portugal $30.3 15.2%
39 Nigeria $74.5 15.1%
40 Egypt $47.5 14.4%
41 Guatemala $8.6 13.4%

*2010-2015 Gross Capital Formation. Source: World Bank & German Statistical Office
**Source: World Bank

About UHY LLP

UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors.” UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP and UHY Advisors, Inc. are US members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. Any services described herein are provided by UHY LLP and/or UHY Advisors (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.

About UHY, the network

Established in 1986 and based in London, UK, UHY is a network of independent audit, accounting, tax and consulting firms with offices in over 296 major business centers across more than 90 countries. Our staff members, over 7,660 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to www.uhy.com.

UHY press contact: Dominique Maeremans on +44 20 7767 2621 Email: d.maeremans@uhy.com.

UHY is a full member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit www.forumoffirms.org.

UHY is an international association of independent accounting and consultancy firms, whose organizing body is Urbach Hacker Young International Limited, a UK company. Each member of UHY is a separate and independent firm. Services to clients are provided by the UHY member firms and not by Urbach Hacker Young International Limited. Neither Urbach Hacker Young International Limited nor any member of UHY has any liability for services provided by other members.

Clayton and McKervey establishes accounting scholarship in honor of Kevin McKervey, CPA

International certified public accounting and business advisory firm Clayton & McKervey, located in metro Detroit, has established a scholarship at the University of Michigan-Dearborn in honor of former firm president, Kevin McKervey, who passed away on March 13, 2016. The scholarship was announced by Clayton & McKervey President Rob Dutkiewicz, CPA, who has led the firm since McKervey’s passing.

“The Kevin H. McKervey Memorial Scholarship will create a permanent remembrance of Kevin while providing ongoing support for accounting students at the University of Michigan-Dearborn College of Business,” Dutkiewicz said. “The scholarship addresses two of his long held passions: investing in the next generation and supporting the U of M Dearborn College of Business.”

McKervey joined Clayton & McKervey in 1990, serving as president for four years after the retirement of Don Clayton. Prior to being named president, McKervey led the firm’s international practice and was instrumental in the firm’s growth and development.
In addition, McKervey served on the U of M Dearborn College of Business Dean’s Board of Advisors for 15 years. He received the University’s Award for Professional Growth and Scholarship in 2009 and was named the College of Business Alumnus of the Year in 2012.

To be eligible for the Kevin H. McKervey Memorial Scholarship, candidates must be working accounting students who have demonstrated leadership skills, possess a cumulative GPA of 3.2 or above, and are pursuing their first career. Additional details on the scholarship are available on the U of M Dearborn website. The inaugural scholarship will be awarded at the UMD Honors Banquet in the fall.

About Clayton & McKervey

Clayton & McKervey is a full-service CPA firm helping middle-market entrepreneurial companies compete in the global marketplace. The firm is headquartered in metro Detroit and services clients throughout the world.

To learn more visit claytonmckervey.com