British manufacturing, RIP

UK manufacturing is in terminal decline. That seems the natural inference from today's official figures on company profits.
They show that the net return on capital in the services sector was 20.1% in Q2 - the highest since records began in 1989. However, the profit rate in manufacturing fell to 6.1%, its lowest since 1992.
The gap between profit rates in the two sectors, at 14 points, is the highest since these records began. I find it hard to imagine that it was ever bigger before 1989.
I guess globalization is a cause of this divergence. Low price competition from overseas is hurting manufacturers, who compete with foreign firms, but is benefiting services firms.
This huge gap in profits should accelerate deindustrialization, as businesses shift from low-profits manufacturing into more remunerative areas.
Strictly speaking, we should not infer anything about  particular firms from macroeconomic data.
However, I suspect these data show that Adam Barlow might not have been so stupid to sell his share in Underworld, as its future must be jeopardized by low-price foreign competition - a fact no-one at Corrie seems to notice.
Then again, what matters in any investment is the total return. Throw in the chance to (cough) meet Frankie Baldwin, and the total return at Underworld becomes very impressive.

Comments

[james higham]

Didn't it go into decline, Chris, when they sold Rover? By the way, what do you think of DK's flat tax?

[dearieme]

Them there eyes: coloured contact lenses, or the real thing?

[calmo]

Ok, Stumbling loses a couple of points for stooping and slobbering.
What we need to see here is the cleavage between China's productive capacity and the withering US consumer as the housing engine sputters.
Not all of us watch the soap operas for relief from the macroeconomic data.

[Linda]

Oh but she is lovely though, isn't she?

[james higham]

Few posts, Chris. Are you in Bournemouth?

[Will Williams]

Perhaps UnderWorld will become a designer label? Frankie and the supply of WAGs to be found in the North West might help create and promote a niche market.

Frankie is an example of a sought-after Hull product.

[chris]

Thanks Will - you've just confirmed one of my prejudices.
I'd always thought Frankie was an exception to my theory that Northern birds are better-looking than southern ones. Now I know she actually corroborates my theory.