Profit warnings in the West Midlands rose by almost a third in 2008.
According to the latest research by Ernst & Young, there were 31 profit warnings compared to 21 in the previous year – with 15 in the final quarter of the year, double that of 2007.
UK plc also appears to be struggling as the economic outlook darkens, with profit warnings for 2008 totalling 449, the highest yearly figure since 2001 and 17 per cent higher than 2007.
Ian Best, a restructuring partner at Ernst & Young’s Birmingham office said: “The last 12 months have seen a significant leap in the number of profit warnings issued by listed companies in the West Midlands and across the UK, making 2008 one of the worst years of warnings on record. With credit markets still frozen and confidence continuing to deteriorate, the next 12 months look set to be equally dramatic, if not more so.”
Profit warnings issued from the West Midlands in quarter four 2008, were attributed to ‘credit crunch’, ‘customer problems’, ‘delays or discontinued contracts or negotiations’, ‘difficult trading conditions’, ‘exchange rate changes’, ‘increasing costs and overheads’, ‘sales short of forecasts’, and ‘weakening consumer confidence’.
The highest warning sectors in the last three months of the year were industrial engineering, automobiles and parts, household goods and home construction and software and computer services.
Mr Best added: “It would be difficult to predict anything other than a deteriorating economic climate.”