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UK firms defy corporate casualty fears to grow bottom lines
by Sarah Miloudi on Jan 09, 2013 at 10:21
UK companies have narrowly avoided capitulating to the slowdown, with the manufacturing, services and private non-financial sectors all reporting a rise in profitability.
Fund managers like Neil Woodford have been on their guard against profit downgrades, but an analysis from the Office for National Statistics (ONS) showed British firms have been able to safe guard their bottom lines.
Looking at figures from 2012's third quarter, ONS analysts found manufacturing companies' net rate of return increased to 4.7% from 4.6%, while service companies enjoyed a rise to 16.9% from 16.5%.
Private non-financial companies extended this trend and saw their net rate of return increase to 12.2% from 12.1%.
Some of the shine was taken off the ONS figures by renewed fears about GDP, however, and the data follows concerns voiced by the likes of Invesco Perpetual's Woodford that some companies will struggle as growth remains weak.
Howard Archer, of IHS Global Insight, this morning pointed to narrowed trade deficit figures that although were positive, showed only 'limited' improvement, hinting a contraction in UK GDP may be on the cards.
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