Profitability of UK companies revealed

Statistics detailing the profitability of UK companies from April to June 2017 were recently released by The Office for National Statistics. The statistics showcased the profitability of UK companies throughout 2017, measured as net rate of return, and is calculated as the economic gain shown as a percentage of the capital used in production.

The results which were released last month, found that profitability of private non-financial corporations had a slight fall in their net rate of return from 12.9% recorded in Quarter 1 to 12.6% in Quarter 2. The UK continental shelf companies net rate of return also saw a decline to 3.2% in Quarter 2, its first fall in profitability since Quarter 2 in 2016.

The profitability of manufacturing companies held steady with the rate of return following a general increase 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 across all business sectors and could have a positive outcome for recruitment businesses especially if manufacturing businesses look to recruit in the New Year following their increase trend.

One thing to keep in mind for your business is to ensure that you do not overextend, even if there is a possibility of growth it is always essential to manage your risk against potential client insolvency.

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