The recession has cost the UK metal traders industry £1.8bn in lost profit in the last year, according to new research by David Pattison, senior analysts and author of the Plimsoll Analysis.
He says the sector has been hit hard, with more than half of companies making less profit than they were a year before.
Pattison suggests the collapse is due to subdued demand and the resulting competition. Many companies are unable to charge the price they need to make healthy profit margins. In the absence of pricing power many companies will have to make necessary cutbacks in 2010.
The burden of lost profit is not being shared equally, 521 companies have bore the brunt of the downturn. These companies have seen their profit margins decimated. There will be further job losses and closures as companies look to claw themselves back to profit next year. If they fail to act quickly they could find themselves running out of cash.
Amazingly, 188 companies have maintained or increased their profit margins in the last year. While some them made cut backs to match their lower sales expectations, others have managed to grow their business and increase their profit margins in the recession.
The analysis gives an instant performance rating on the top 1001 companies in the market. Each company has been rated as Strong, Good, Mediocre, Caution or Danger according to their latest performance. A graphical and written analysis indicate which companies are in trouble and who is getting it right.
Readers of Steel Times International are entitled to a £50 discount of this new special edition of the Plimsoll Industry Analysis - Metal Traders. Call +44 (0) 1642 626400 for further details and quote reference PR/MT25.