Profitability of UK companies revealed
The Office for National Statistics recently released the profitability of UK companies statistics for April to June 2017. The profitability is measured as net rate of return and is calculated as the economic gain, shown as a percentage of the capital used in production.Released in November, the report found that profitability of private non-financial corporations also known as PNFCs had a slight decline in their net rate of return from 12.9% recorded in Quarter 1 to 12.6% in Quarter 2.The net rate of return for UK continental shelf companies (UKCS) also fell to 3.2% in Quarter 2, its first fall in profitability since Quarter 2 in 2016.The profitability of manufacturing companies held steady. The rate of return for manufacturing has followed a general increasing trend since 2009. Interestingly the Bank of England Quarter 2 2017 Agent’s report suggested that the growth in the sector had picked up and the fall in sterling would have led to an increase in export volume growth.This report shows an interesting net rate of return for the PNFC and UKCS sectors however it is positive to see that the manufacturing has remained steady rather than experiencing any decreases.