§ Mr. Austin Mitchellasked the Secretary of State for Industry what is his estimate of the rate of return on sales and on capital employed in manufacturing industry at present; and how this compares with the corresponding figures for each of the years 1970 to 1980.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer what is the ratio of sales to capital employed in manufacturing industry on the basis of historical costs: and what is his estimate of the current rate of profitability in manufacturing in terms of sales and capital employed.
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§ Mr. MacGregorI have been asked to reply also to the question addressed to the Chancellor of the Exchequer.
The ratio of sales to capital employed on the basis of historical costs for large listed companies in manufacturing industry was 230 per cent. in 1977. Estimates of the rate of profitability in terms of sales are presently limited to the information in the table in the answer given to the hon. Member on 2 April 1980 by my hon. Friend the Under-Secretary of State for Trade.—[Vol. 982, c. 241.]
Estimates of profitability in terms of capital employed are given in the following table which is based on national accounts data.
Net rate of return at current replacement cost* for Manufacturing Companies Per cent. 1970 7.5 1971 7.6 1972 8.1 1973 8.0 1974 3.3 1975 3.9 1976 4.1 1977 5.6 1978 5.6 1979 3.7 1980 †2 * Defined as gross trading profit less stock appreciation and capital consumption at current replacement cost, as a percentage of net capital stock of fixed assets, excluding land, at current replacement cost plus book value of stocks. † Broad estimate.