While some companies are setting new standards, British industry, despite playing some effective catch-up over the past 10 years, remains uncompetitive in many regards.
Well, well, I hear the cynics mutter, that's hardly new. Perhaps - but the CBI's conclusions also offer investors a useful slant to bear in mind when examining a company. And nor need these criteria be soft focus, "nicey nicey" people values.
What the CBI had to say about the laggards of British industry was hard- hitting and commendably factual. Poor performers, it seems, suffer from poor innovation, low levels of research and development, and poor training. They also fail to involve employees - another way of stating the great British failing, of treating the employee as an appendage to be considered last, or not at all, in any management-inspired vision. It is hardly surprising then, that many of these schemes backfire, if employees cannot understand management's thinking, or if bosses are unable to communicate their views. There are also failings to understand the needs of customers and suppliers.
The relevance of this to share selection and investment may be difficult to quantify, but it is of more than merely academic interest. Too often, investors judge a company solely by the numbers. Of course, these are crucial, but one should never overlook the wealth of data available in other, less tangible guises.
Is it a surprise that companies where employees are disaffected are unlikely to perform better than those where employees are well-motivated and respected by their employers?
Investors should look at other tell-tale signs; industrial unrest, staff turnover, manufacturing problems and customer satisfaction can all give hints. It is also another reason for investors to stick to companies where they believe they have a reasonable understanding of the business. That way, they may find out sooner than the rest of the pack when things are going wrong.
Last week, The Electronics Boutique, owner of a chain of computer games stores, reported interim figures for the period through to the end of July. Sales were ahead 76 per cent, at pounds 42.8m, and the group scraped in a pounds 600,000 pre-tax profit - unusual, given that its profits only show through after the all-important Christmas period. We tipped the shares here at the start of the year, when they stood at 24p, and they now stand at 37p. Further growth is on the cards, and the stock is a strong hold.
Loftus Road - the only company to own a rugby union club, Wasps, and a football club, QPR - has been given the thumbs down in a report on football shares, by stockbroker Greig Middleton. Analyst Nick Batram says the concept, multiple use of stadiums through ownership of a number of sporting franchises, was a sound one. But with QPR languishing in Division One, there are now gaping holes in this strategy. Management will have to invest heavily if QPR are to return to the Premiership. Wasps has its own problems, as it comes to terms with the change to a professional game. "An investment in Loftus Road in the short term amounts to a pure gamble on QPR regaining its position in the Premier League," Mr Batram says. Avoid.