Listed companies in the West Midlands issued 25 profit warnings in 2022, more than three times the number issued in the previous year, according to new research.
In the final quarter of last year, seven profit warnings were issued by companies based in the region, one fewer than in the previous quarter, according to the latest EY-Parthenon Profit Warnings report.
Nationally, the number of profit warnings issued by UK-listed companies in 2022 increased by 50 per cent year-on-year, with record levels of warnings citing rising costs.
In total, 305 profit warnings were issued in 2022, an increase of 102 from 2021 when 203 warnings were issued. Half (152) of the warnings issued in 2022 were due to rising costs - double the share in 2021.
During the year, 17.7 per cent of the UK's 1,193 listed businesses issued a profit warning, equal to the proportion of companies which issued a warning during the global financial crisis in 2008.
In the second half of 2022, 169 warnings were issued across the UK which is the highest second-half total since 2015.
Dan Hurd, a partner at EY-Parthenon in the Midlands, said: "As we enter 2023, rising operational costs and interruptions to supply chains continue to put business resilience to the test.
"This stress is now deepening as the cost-of-living crisis and changes in consumer buying behaviour affect other sectors and industries.
"In the Midlands, the automotive, household goods and construction sectors reported the most profit warnings as the cost pressures experienced last year now pass further up the supply chain, lowering business confidence. Forecasting and planning will remain challenging this year but will be critical to ensure a business' long-term survival.
"While difficult times lie ahead, out of adversity comes the potential for new opportunities as businesses continue to adapt to meet rising pressures."
Claire Gambles, also a partner at EY-Parthenon in the Midlands, added: "Although festive trading was better than expected for many businesses, the bar was set low by exceptional levels of consumer sector profit warnings in 2022.
"The 'golden quarter', a vital period for consumer companies, included a winter World Cup along with the disruption from train and postal strikes.
"This backdrop created a further complex layer of challenges and opportunities in addition to ongoing cost, labour, inventory and confidence issues for consumer-facing companies.
"Supermarkets appear to have been the main winners of Christmas 2022, while many omnichannel retailers managed to flex their offering to adapt to the impact of industrial action and performed well."
