BigCo: Not rescuing Britain, yet
There were results from seven FTSE 100 companies this morning: Rolls-Royce, BAE Systems, Royal Dutch Shell, AstraZeneca, Reed Elsevier, British Sky Broadcasting and BT Group.
They provide some kind of picture of the health and prospects of Britain's biggest companies.
What they show is that BigCo has come through the worst recession since the 1930s in better shape than some might have expected: typically their indebtedness has been falling gently and is at bearable levels; sales and earnings are flat or rising gently.
There's a strong emphasis in their respective announcements on containing or reducing costs: Shell boasts of enormous $3.5bn annualised cost savings that it has made; BAE cut headcount by 3,300 in the first half of the year; all BT's profit growth came from reduced operating costs; AstraZeneca is closing two major research sites; at Shell, net capital investment is broadly flat; at Reed, the emphasis is all about generating cash in a climate where demand from business and professional users is flat.
And although they all talk the talk of investing for the future, in practice they are maintaining investment rather than increasing it: investment in research and development at Rolls-Royce was flat at £436m in the first half; capital expenditure at BT fell in the first quarter; at AstraZeneca there's very tight control of investment.
Now the one outlier or anomaly is British Sky Broadcasting, which happens to be the most domestic and the most consumer facing of all the businesses. What is striking about BSkyB is that its emphasis is on containing cost growth rather than cutting costs. It significantly increased investment in new programmes and content and it is putting money into new services (such as 3D TV).
So what does all this mean for the British economy?
Well it would be dangerous to draw firm conclusions, even from the results and expectations of seven such big companies, partly, of course, because all of them (except BSkyB and to a lesser extent BT) are very international, both in terms of where they employ people and where they sell their stuff. Arguably they're only British in the sense of where they have their respective head offices.
But their plans do pose something of a challenge to the government's hopes of a "balanced" economic recovery in the UK.
In a climate where public spending is being slashed and where British consumers cannot and should not be relied on to increase spending, because of the imperative of paying down their record debts, it really matters that BigCo invests more in the UK, employs more people in the UK and exports more.
At some point, all of that will of course happen. But it is not obvious from the results and expectations of these seven companies that the revival of business leaders' animal spirits will happen sufficiently quickly to prevent economic growth in the UK being anaemic to the point of non-existence for some considerable time to come.