Profitability is up for British companies – but the rise is entirely accounted for by North Sea oil and gas operators.
Figures from the Office for National Statistics (ONS) show the net rate of return – the key profitability index – rose during the first quarter of this year from 12.5% in the last three months of 2017 to 12.6%.
But within this figure, the profitability ratios for manufacturing and services, which make up the backbone of the UK economy, both fell.
Services profitability at four-year low
In manufacturing, the rate of return dropped from 15.9% in the fourth quarter of last year to 15% in the first three months of 2018.
For services, the rate of return fell from 18.4% in the fourth quarter of 2017, to 17.2% in the first three months of this year.
The ONS said manufacturing profitability, while lower than the previous quarter, was still at its third-highest level since comparable records began in 1997. But, that the figure for services was the lowest since the fourth quarter of 2013.
The net rate of return figure is calculated as the profit earned as a percentage of the capital used to create it. It is a net figure as it accounts for the depreciation of fixed assets.