Profitability of UK private non-financial corporations
The overall profitability of UK private non-financial corporations in the third quarter of 2009 was 11.5 per cent, down from the revised estimate of 11.7 per cent recorded in the previous quarter. Annually, the revised average net rate of return in 2008 was 14.1 per cent, in line with the 2007 estimate of 14.2 per cent.
The net annual rates of return on investment within the services and manufacturing sectors have settled into a fairly stable picture over the course of this decade. The quarterly rates of return show more variability due to the nature of the data and process used to produce the latest estimates. Services industries are generally returning around 16 per cent against the capital employed. Manufacturing industries, which tend to be more capital intensive, have shown net annual returns just under 10 per cent against the capital employed.
Notes: Data in this release have been revised back to the first quarter of 2008, in line with the Quarterly National Accounts publication of 22 December 2009.
Profitability is defined as the net rate of return on capital employed. That is, it is the value of profits (allowing for depreciation) divided by the value of fixed assets (allowing for depreciation) and inventories.
Data for periods after 2007 (that is those that fall outside of the latest Blue Book GDP balancing process), for both the capital and profits estimates, are of a less certain nature and are therefore prone to sometimes significant revision at a later date.
Further information on the definitions of profitability and how it is calculated can be found by clicking on the link to ‘What is Profitability’ in the right hand column.
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Profitability of UK Companies Press Release