UK corporate profitability reached a 16-year high in 2014 despite easing back in fourth quarter, new figures have shown.
But the Office for National Statistics (ONS) figures showed the industry hit an 18-year low in the final quarter of last year.
Measured in terms of “net rates of return”, corporate profitability for all non-financial UK firms improved to high of 11.9% in 2014.
This was up from 11.2% in both 2013 and 2012 and a low of just 9.7% in 2009, according to analysis by economics firm IHS.
Companies benefited from extended healthy UK growth and were significantly helped by reduced input costs boosting their margins, IHS said.
Manufacturing companies had it best – their profitability actually increased to 12%, up from 10.3% between July and September. However this was a drop on the second quarter performance of 13.4%.
But the ONS figures showed that Continental Shelf (UKCS) companies’ net rate of return was 10.4 %, the lowest rate since the series began in 1997.
Unions hit out at the oil and gas industry and government for failing to address the impact of the oil price crash.
RMT General Secretary Mick Cash said: “The Coalition Government has actively mismanaged the offshore industry, effectively ignoring the fast developing crisis that today’s ONS figures confirm.
“The Budget 2015 tax cuts for the industry were a blunt, pre-election tool to appease shareholders and do nothing to protect the long term viability of the oil and gas industry in the North Sea or the skilled workers that the industry and the country really cannot afford to lose.”
Steve Todd, the RMT’s national secretary, added: “These figures confirm that the next Government should support RMT’s call for protections for the offshore workforce which would prevent a premature decline in exploration and production activity offshore. Any further support to oil and gas companies should be conditional on training and jobs for UK offshore workers, as well as an end to the imposition of longer shifts for no extra pay which continues to undermine industrial relations offshore.”
Meanwhile, another set of ONS figures showed that UK goods exports fell to their lowest level in four-and-a-half years in February – despite improved profits.
The ONS also revised an initial strong reading for January’s trade deficit to show it was much worse than previously thought.
The figures echo a sharp drop in manufacturing export orders recently reported by the CBI, which warned that the strength of the pound was weighing on performance.
Yesterday’s goods data showed goods exports fell to £23.2billion in February, the lowest level since September 2010, mainly reflecting a fall in sales to the US. It took the goods deficit to £10.3billion, its highest since July last year.
Manufactured goods exports fell £1.1billion to £18.6billion. It was the lowest level since last August and the biggest drop since July 2013 – but this was offset by an uptick in fuel exports.
Howard Archer, chief UK and European economist at IHS Global Insight, said: “The trade data are undeniably disappointing and deal a significant blow to hopes that net trade helped UK GDP growth in the first quarter.”