Interim Manager Day Rates Rising and Corporate Profits hit Record High!

Life is looking pretty rosy currently; Impact Executives' most recent survey (06-Q2) suggests that day rates are rising again, with 37% of respondents saying their current assignment is better paid than their previous one. That figure has risen from 32% six months ago. It is particularly healthy among Interim Managers' earning between £700 and £1500 a day and this is perhaps reflecting the more strategic use of Interims? As if this was not enough, this week it gave us great pleasure to read that UK Corporate Profits have reached record rates of return in the second quarter according to official figures in Times Online-keep bringing on the good news.

"British businesses achieved record rates of return in the second quarter as the services sector shrugged off higher energy costs and tapped cheap labour markets to lift margins, according to official figures published today.

The overall profitability of non-financial companies reached 14.7 per cent in the second quarter, up from 14.4 per cent in the previous three months. The figure is the highest since the data series began in 1989, the Office for National Statistics said.

The performance was boosted by a strong showing in the services sector, which accounts for the lion's share of the UK economy, where the net rate of return rose to 20.1 per cent from 19.5 per cent, itself a record.

Howard Archer, the chief UK and European economist at Global Insight, said: "Firms have been able to keep their overall costs down by limiting wage increases amid increased slack in the labour market, while relatively healthy economic activity in the first half of the year lifted demand and boosted companies' pricing power."

Record profitability levels also boosted hopes for stronger investment, Mr Archer said.

However, high energy and commodity prices have hit manufacturers, where profitability fell back to 6.1 per cent in the second quarter - down from an average of 9.3 per cent in 2005. In general, capital intensive manufacturers trail service businesses in terms of profitability levels.

The fall in manufacturing returns follows a report published yesterday by the Chartered Institute of Purchasing and Supply which showed manufacturers maintained a solid degree of pricing power in September, as average factory gate prices rose for the 14th month running.

The rate of increase in raw material prices eased to a five-month low, suggesting that the recent upturn in input cost inflation may have peaked in the previous month.

Roy Ayliffe, director of professional practice at CIPS, said: "To mitigate the continued high input prices, purchasing managers are shrewdly managing stock inventory by reducing both pre- and post- production stock."

According to today's ONS figures, profitability at oil and gas extraction companies fell to 38.7 per cent in the second quarter, from 39.6 per cent in the previous quarter, as oil prices dipped in recent weeks.