15 January 2001, 15:15 Survey: UK companies Q4 activity higher but profitability lower
By BridgeNews
London--Jan. 15--U.K. firms reported strong business activity in the
fourth quarter of last year but suffered yet a further squeeze in
profitability, according to the EULER Trade Indemnity Quarterly Financial
Trends Survey. The survey blamed intense competition, the sterling-euro
exchange rate, higher oil prices, wage costs, and slower order book growth
for the shrinking profitability.
* * *
The ETI profitability index for the whole economy measured 45.4 in the
fourth quarter from 44.6 in the third quarter. A reading beneath 50 means
deterioration and a reading above means improvement. The latest reading
signals deterioration but at a slower rate than the previous quarter.
Within the total, manufacturing profitability continues to suffer the
most.Its index measured 40.9 in the fourth quarter from 38.6 in the third
quarter but still making it by far the weakest sector.
Distribution, which includes retail, was the next weakest and
experienced a sharp fall in the latest quarter. Its index measured 44.4
from 49.6 in the third quarter. The services sector, in contrast, staged a
recovery, jumping to 52.1 from 44.4.
Construction remained the strongest sector, with profitability
measuring 55.8 from 55.7 in the previous quarter.
Companies also complained that payment delays worsened in the fourth
quarter from both domestic and overseas customers.
The survey was carried out by NTC Research and covered 510
respondents.
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