Profitability of Non-Financial UK Companies Increased in Third Quarter 2013

The profitability of non-financial sector British companies involved in manufacturing, services and oil exploration, increased during the third quarter of 2013, according to the Office of National Statistics.

The ONS said private non-financial corporations' profitability, as measured by their net rate of return, was estimated at 11.3% for the third quarter of 2013.

This was in line with levels over the previous four quarters and but lower than the levels recorded in 2011.

The net rate of return is calculated by expressing economic gain or profit as a percentage of the capital used to produce it.

Manufacturing was surprisingly strong as the net rate of return was estimated to be 9.5% in the third quarter of 2013, the highest level since the second quarter of 2011.

Similarly, the net rate of return for services companies was thought to be 14.4% that is high level compared to recent periods but not below the highs seen between 2003 and 2008.

Business investment in grew by 2% during the third quarter of 2013. According to data from Ernst & Young UK main market and AIM listed companies issued 56 profit warnings in Q3 2013, 12 fewer than in the same period in 2012.

British companies involved in the exploration and extraction of oil and gas known as United Kingdom Continental Shelf Companies saw a net rate of return of 47.6%. This was above the levels seen in last two years but below that seen in quarter two of 2011.

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