While we moan about are low productivity in the UK, here’s some good news which perhaps goes a long way to explaining why the UK has been a star performer in the Eurozone over the last few years.
The top British companies are creating more wealth than their counterparts in the Eurozone, or so says a new report from the DTI. The report found that of the top 700 firms in Europe by value added, 197 companies are British, Germany could only muster 96 and the French a mere 91.
.The DTI index measures wealth creation as operating profit plus employee costs plus depreciation amortisation. But perhaps it’s another index that really throws interesting light on the whole shebang. The DTI also found that UK companies are more efficient at creating wealth. By dividing value added by the sum of employee costs and depreciation, it has found that the 197 British companies in the European 700 have a wealth creation coefficient of 173, compared to an average of just 153.
Apparently, efficiency in wealth creation is a good indicator of share price performance too. According to the DTI, a portfolio of 21 companies from the top 197 companies saw an increase in share price of 109% over the period 2003 to 2006. The FTSE 350 index rose by only 69% over the same period.
For further information
Uk Companies Top European Wealth Creation League Dti
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