UK companies hit by profit worries

UK companies hit by profit worries

The latest batch of surveys and statistics point to an overall squeeze on company profits across all sectors of the economy, with financial services, IT and manufacturing the most hit hardest.

According to the latest Confederation of British Industry/PricewaterhouseCoopers survey of the financial services sector, the number of non-performing bank loans has risen by the highest rate since 1993.

To compound problems for the sector, securities traders, fund managers and banks reported significant drops in business volumes.

Sudhir Junankar, CBI associate director of economic analysis, said financial services companies seem less confident about longer term business prospects, with concerns about likely demand conditions at their highest levels for almost three years.

And John Hitching, financial services partner at PwC, said ‘control of costs’ was a problem across almost the whole sector, adding that it pointed towards a slowdown in ‘investment intentions, particularly in IT’.

But profitability slowdown is not confined to the financial services market.

Latest government statistics show while the price of manufactured goods has risen by just 0.8% on the year, the cost of raw materials had climbed more than three times faster at 2.6%.

Manufacturers have been unable to pass on these added costs to the consumer, and as a result profitability levels of companies within this sector have fallen to a nine-year low.

Links

CBI’s financial services survey

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource