THE profitability of UK companies outside the financial sector fell to an eight-year low between April and June, official figures showed today.
Their rate of return on capital fell to 11.6% - the lowest since the second quarter of 2001, according to the Office for National Statistics (ONS).
Among hard-hit manufacturers the profitability measure was just 6.7% during the second quarter of the year - edging up from the 17-year low of 6.2% recorded in the first three months of 2009.
Today's figures represented a fifth consecutive quarterly decline in profits since the first three months of 2008, the last quarter before the UK entered recession.
Despite signs of profit recovery among manufacturers and services firms, oil and gas explorers have also been punished by collapsing crude prices.
When oil prices hit 147 US dollars a barrel in July last year, the rate of return for oil and gas firms soared to 73.8% - although it has since fallen back by more than half to 33.6%.
Most experts predict the UK to have exited recession between July and September this year, although the path ahead for the fragile UK economy looks uncertain.
Despite survey evidence of a return to growth among services firms, figures this week showed a surprise fall in output among manufacturers during August after two months of growth. Meanwhile unemployment reached 2.47 million in the quarter to July and is set to reach three million next year.
IHS Global Insight economist Howard Archer said: "While the economy may well have returned to growth in the third quarter, recovery seems likely to be gradual and relapses could well occur.
"Profitability is likely to remain under significant pressure for some time to come. Meanwhile, companies’ weakened profitability is likely to have a limiting impact on investment and employment."