Crisis and profitability in UK companies.

http://www.guardian.co.uk/business/2009/oct/07/uk-firms-low-profitability

Economic crisis has affected companies all around the world and UK isn't an exception. But apparently what's going on is even worst for industrial activity; namely, manufacturing companies. Acording to the ONS (office for national statistics), companies outside the financial sector fell their profitability to the level they were 8 years ago. Only in 2009, the number has decreased over a 12%.

Nevertheless, services sector seems to be recovering and has incresead it profitability increasing to 15.6% in the second quarter of 2009. If that number is compared with 13,6% obtained previous quarter, signs seem to be clear.

Howard Archer, important UK economist explain this situation blaming the deep recession that hit's companies' sales hard and limited their pricing power. Moreover, situation becomes more complex because economy has returned to growth in this third quarter, but recovery doesn't seem to appear to a lot of companies of the manufacturing sector, which is, by the way, the sector which offers the biggest amount of employments. So, it's recovery would increase consumption power to a lot of people, recovering that way a healthy economy. If this is not to happen, relapses could well occur.

Another important subjetc related to this is that fall in profitability means tax receipts will be lower aswell. consequently, public finances will be affected (in fact, they already are) and an important budget deficit is going to stay as a remain of this crisis, even when it's over.