Latest EY Profit Warnings report reveals 11 quoted North West companies issued profit warnings in Q4 2016, three more than the previous quarter. Tony McDonough reports.

There was a rise in profit warnings among stock market-quoted companies in the North West in the final quarter of 2016.

According to the latest EY Profit Warnings report, 11 quoted North West companies issued profit warnings in Q4 2016, three more than the previous quarter.

Across the UK quoted companies issued 73 profit warnings in Q4 2016, five more than the previous quarter, but 27 fewer than Q4 2015, when warnings spiked following the fall of the oil price.

According to the report, the number of profit warnings reflects relative stability in both the UK and global economy in the second half of 2016, with UK consumer spending in particular defying expectations.

Behind the headlines, however, the report says that there are less positive signals. A record level of FTSE Support Services warnings in 2016 suggests that businesses are starting to react to uncertainty, as does the 27% of warnings citing contract delays or cancellations in the final quarter.

Companies exposed to the weak pound are also reporting increasing pressure on earnings, with 11% of warnings citing adverse exchange rates.

Sam Woodward, restructuring partner at EY in the North West, said: “The headline numbers show the UK economy weathering the initial impact of the Brexit vote remarkably well, but 2017 could be a tough one for many companies as they face up to the challenges associated with significant changes in the political and economic consensus.

“It’s certainly not business as usual and it’s likely to be a testing time for UK plc.“