Engineering profitability leads the way

Profitability grew faster in engineering than in any other sector in the second quarter of the year, according to a report released this week. The survey, by information company Experian, said returns on capital among the UK’s top 250 engineering companies rose from 11.6% to 12.5% from the first to the second quarter of this […]

Profitability grew faster in engineering than in any other sector in the second quarter of the year, according to a report released this week.

The survey, by information company Experian, said returns on capital among the UK’s top 250 engineering companies rose from 11.6% to 12.5% from the first to the second quarter of this year, and by a fifth on the second quarter of 1998.

The sector also managed to close the gap with the UK average capital return, which fell slightly to 14%.

Tough management decisions underly the improvement, said a spokesman for Experian: `Engineering firms have taken steps on manpower and investment to maintain profits. It has probably been painful for a lot of them.’

Profits rose to a three-year high in the West Midlands manufacturing heartland. The east Midlands saw the largest rise in returns on capital – from 13.3% to 14.5%.

Meanwhile, the latest production figures appear to show that the manufacturing recovery is slowing down. Engineering output slipped back by 0.5%, while overall manufacturing output increased by just 0.1% in October, the Office for National Statistics said on Monday.