Strong profits provide a buffer

Could the high profitability of the UK business sector offer a ray of hope for the economy as the slowdown starts to bite?

This could be the message from the latest set of data which finds that the profitability of British companies outside the fragile financial sector hit a record high in the final three months of 2007. The net rate of return on capital employed for non-financial companies rose to 15.5 percent. As is the norm, profitability in services is much higher than for manufacturing firms with service companies’ net rate of return was 21 per cent contrasted with less than 9 per cent for manufacturing. The latest net rate of return for North Sea oil companies was 50 percent, reflecting booming oil and gas prices. Whilst rising oil prices have spiked up production cost throughout the supply chain, it has been like manna from heaven for the oil and gas producers.

Unit 2 Macro: Cyclical and Structural Economic Issues Facing the UK [23 May 2012]
Unit 3 Micro: Game Theory and Business Economics [21 May 2012]
Unit 2 Macro: The Current Account of the Balance of Payments [20 May 2012]
Unit 2 Macro: Migration and the UK Economy [20 May 2012]
Unit 2 Macro: The Importance of Productivity [20 May 2012]
Revision notes on unemployment [20 May 2012]
Unit 2 Macro: Revision Notes on Supply-side Policies [10 May 2012]
Unit 2 Macro: Model answer for revision data question [9 May 2012]
Made in China - but not quite so cheaply…... [7 May 2012]
Unit 4 Macro: TV Assembly Back in the USA [5 May 2012]
Unit 2 Macro: Growth and Development Glossary [5 May 2012]
Robert Schiller - Finance and the Good Society [1 May 2012]
Tullow Oil and African Development [25 Apr 2012]
Unit 3 Micro: The Third Industrial Revolution [20 Apr 2012]
Unit 2 Macro: Skills Shortages Hold Back Recovery [12 Apr 2012]
Unit 3 Micro: Quiz on Business Costs and Profits [11 Apr 2012]
Unit 3 Micro: Revision on Entry Barriers [10 Apr 2012]
Unit 3 Micro: Revision on Business Objectives and Pricing [8 Apr 2012]
Unit 3 Micro: Revision on Monopoly Price and Output [6 Apr 2012]
Unit 3 Micro: Monopoly and Economic Welfare [6 Apr 2012]
Unit 3 Micro: Revision on Scale Economies and MES [5 Apr 2012]
Unit 4 Macro: Productivity Improvements in China [3 Apr 2012]
Unit 1 Micro: Revision on Producer Subsidies [2 Apr 2012]
Unit 1 Micro: Revision on Producer Cartels [31 Mar 2012]
Unit 2 Macro: Revision on Index Numbers [31 Mar 2012]
Unit 2 Macro: Revision on Capital Investment [30 Mar 2012]
Unit 3 Micro: EU Imposes Further Price Cap on Mobile Phone Companies [29 Mar 2012]
Beyond the Bike - Gold Digging in Sudan [28 Mar 2012]
Unit 4 Macro: Evaluating 3 Years of Quantitative Easing [27 Mar 2012]
Unit 2 Macro: Focus on UK Manufacturing [6 Mar 2012]
Adapt or Die - Lord Bilimoria and the Cobra Story [4 Mar 2012]
Unit 4 Macro: Sovereign Wealth Funds [4 Mar 2012]
Unit 1 Micro: Breaking Down the Cost of Gas [4 Mar 2012]
Unit 1 Micro: Highest and Lowest Paid Jobs in the UK [26 Feb 2012]
Unit 3 Micro: Volkswagen targets growth markets [25 Feb 2012]
Unit 2 Macro: Targeted Tax Cuts to help the Economy [22 Feb 2012]
Unit 2 Macro: China’s Trade Engine is Spluttering [10 Feb 2012]
Unit 1 Micro: The Facebook Floatation [3 Feb 2012]
Unit 4 Macro: Focus on India - Comparative Advantage [27 Jan 2012]
Unit 4 Macro: Focus on India - World’s Cheapest Computer [26 Jan 2012]
Unit 2 Macro: Can China Stay Competitive [25 Jan 2012]
Unit 4 Macro: Focus on India - Economic Growth [24 Jan 2012]
Unit 3 Micro: 3D Printing and a Manufacturing Revolution [23 Jan 2012]
Unit 2 Macro: Exporting to the Booming Chinese Economy [23 Jan 2012]
Unit 2 Macro: Videos on Productivity [17 Jan 2012]
Economics at the Movies - Foods that Make Billions [15 Jan 2012]
Unit 4 Macro: Competitive Advantage in Trade (Some Videos) [12 Jan 2012]
Unit 4 Macro: Does Manufacturing Matter? [10 Jan 2012]
Unit 2 Macro: Factors Driving Business Investment [10 Jan 2012]
Unit 4 Macro: Natural Disasters and their Economic Impact [7 Jan 2012]
Unit 3 Micro: Oligopoly and Duopoly in Bus Markets [20 Dec 2011]
Unit 1 Micro: Inside a Biscuit Factory [1 Dec 2011]
Unit 3 Micro: Hope Bikes - A Commitment to Excellence [30 Nov 2011]
Unit 4 Macro: Does UK Manufacturing have a Future? [30 Nov 2011]
Unit 3 Micro: Brand Loyalty in Mobile Phones [27 Nov 2011]
AS Macro: The State of British Business [13 Nov 2011]
Unit 3 Micro: Unilever hit by rising costs [6 Nov 2011]
Unit 4 Macro: Richard Florida on the Great Reset [5 Nov 2011]
Unit 1 Micro: Google Maps to Charge for Usage [31 Oct 2011]
Can the “invisible hand” solve Africa’s poverty? [13 Oct 2011]
Unit 4 Macro: Bangladesh and Comparative Advantage in Textiles [19 Sep 2011]
Study Note - Value Added and Contributions to a Nation’s GDP [16 Sep 2011]
Unit 2 Macro: Income and Wealth in the UK [12 Sep 2011]
Unit 2 Macro: Value Added in Production and GDP [11 Sep 2011]
Capital labour substitution at FoxConn [2 Aug 2011]
Unit 1 Micro: Cotton Prices and the Retail Price of Clothing [13 Jul 2011]
Unit 1 Micro: Economics of Volatile Corn Prices [12 Jul 2011]
Unit 3 Micro: Motorsport Valley and External Economies of Scale [12 Jul 2011]
Unit 4 Macro: Dangers of High Inflation [11 Jul 2011]
China: The End of Cheap Labour [28 Jun 2011]
Evan Davis ‘Made in Britain’ - and a new trade data tool to play with [21 Jun 2011]
Do you agree that the government should provide support to the UK car industry? [12 Jun 2011]
AS Macro Key Term: Deflation [24 May 2011]
AS Macro Key Term: Recession [23 May 2011]
A2 Micro: Entry Barriers in Markets [19 May 2011]
A2 Micro: The Importance of Profit [19 May 2011]
A2 Micro: High and Low Marginal Cost Products [19 May 2011]
A2 Micro: Consequences of Price Discrimination [19 May 2011]
Unit 3 Micro: Perfect Competition [19 May 2011]
A2 Micro: Competition and Efficiency [19 May 2011]
A2 Micro: Business Growth [18 May 2011]
A2 Micro: Innovation and Economic Policies [18 May 2011]
A2 Micro: Moving Away from Profit Max [18 May 2011]
Unit 3 Micro: Diseconomies of Scale [18 May 2011]
A2 Micro: External Economies of Scale [18 May 2011]
A2 Micro: Economies of Scope [18 May 2011]
UK Economy Update: What Mervyn Said [11 May 2011]
What America makes [4 May 2011]
AS and A2 Macro Revision: Keynesian Economics [28 Apr 2011]
A2 Micro: Changes in Costs and Profits [23 Apr 2011]
Rise in investment could kick start recovery [18 Apr 2011]
Key AS Micro Terms: Competition and Monopoly [17 Apr 2011]
Key AS Micro Terms: Costs and Profits [16 Apr 2011]
Smartphones and Creative Destruction [16 Apr 2011]
China set to become exporter of inflation [14 Apr 2011]
AS Macro Key Term: Frictional Unemployment [11 Apr 2011]
Unit 3 Micro: Solar Panels and Economies of Scale [11 Apr 2011]
UK Minimum Wage rises by 2.5% in October 2011 [8 Apr 2011]
AS Macro Key Term: Gross National Income (GNI) [7 Apr 2011]
AS Macro Key Term: Economic Structure [6 Apr 2011]

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