Corporate profits at ‘all-time high’
Official figures for corporate profitability show that it has risen to its highest level ever.
The profits of non-financial companies were 15.5 per cent in the fourth quarter of last year, up from 15.2 per cent in the previous three months according to the Office for National Statistics. This is the highest since quarterly records began in 1989.
"This impressive performance occurred despite the extended squeeze on margins coming from high energy and commodity prices," commented chief UK economist at Global Insight, Howard Archer. "Firms are generally able to keep their overall costs down by limiting wage increases, while sustained healthy economic activity through 2006 lifted demand and boosted companies' pricing power."
Adrian Cooper, the Ernst & Young Item Club's economic adviser, said: "Profitability is at record levels. This is at last feeding through to strong business investment, which is now the most dynamic driver of GDP growth."
Source: Independent, April 4 2007 (VS)
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