This article, which continues an annual series, reviews the performance of UK industrial and commercial companies during 1990. The main points include:
- Profitability continued to decline during the course of the year, as steeply as in previous recessions, but the level remained above that of both 1974-75 and 1980-81.
- Total income rose, albeit modestly, as the fall in gross trading profits was offset by rises in non-trading income and income from overseas.
- Investment expenditure began to decline from its high level. In contrast, growth in dividend payments remained exceptionally high.
- The financial deficit increased to £27 billion (5% of GDP) compared with £21 billion (4% of GDP) in 1989.
- Bank borrowing was considerably reduced during the year, with some switch towards the capital markets.
- Company insolvencies, which began to increase in 1989, rose by 44% in 1990.