UK-headquartered companies posted their lowest profits in nine years during the third quarter of 2002, according to data released Tuesday by the government’s National Statistics Office.

The net rate of return on investment across all sectors fell from 11.7% in Q2 to 11% – the worst average performance since 1993.

As might be expected the manufacturing sector fared even worse with average ROI falling from 7.6% to 6.8%. The picture was less grim in the services sector which returned 13.1% ROI compared with 14.2%.

The situation was underscored in a report from beancounter Ernst & Young which recorded a 33% rise in listed company profit warnings during Q3.

But as the accountancy profession knows better than most, numbers tend to mean what you want them to mean – and yesterday’s data was based solely on ROI.

The picture is far brighter when viewed through the prism of gross operating surplus – generally accepted as the true value of company profits. On this basis, profits in Q3 actually rose by 0.9% to £48.2 billion ($77.17bn; €74.14bn).

Economists attribute the difference between the two measurement criteria to the massive wave of investment during the 1990s. The resultant fierce competition has led to tougher trading conditions and widespread margin-slashing.

Data sourced from:; additional content by WARC staff