UK profitability continues steep decline
The latest corporate health check has found that profit levels amongst UK companies have fallen sharply for the 14th consecutive quarter, a record decline.
Measured as return on capital, leading British companies’ profitability was 6.98% for the quarter to September 2002, compared with 7.57% to June 2002, according to Experian.
It has now more than halved since June 1999, when profitability was recorded at 14.18%
Over the last four years profitability decline has increased for each of the years. The worst-hit sectors include IT, media telecommunications and engineering.
Only the oil sector reported an increase in profit levels.
The drop reflected falling business confidence and is unlikely to improve given the current conflict in Iraq.
Peter Brooker from Experian said it was ‘debatable whether consumers will have the confidence to prop up the economy’ during and after the war.