The number of profit warnings issued by West Midlands-listed businesses reached a record-breaking high in the first three months of 2020 - higher than any previous quarter in the last two decades.
The latest report from EY shows that 21 profit warnings from the region's businesses were recorded between January 1 and March 31, 2020 - compared to just nine for the same period in 2019.
Unsurprisingly the significant increase in warnings was attributed to the Covid-19 crisis.
Dan Hurd, EY’s head of restructuring in the Midlands, said: "The sectors issuing the highest number of profit warnings were those most exposed to the impact of national lockdowns and in many cases were already showing signs of stress.
"Covid-19 has created new problems, but it has also accelerated existing structural change and exacerbated existing weaknesses. When lockdown lifts, it will undoubtedly ease some pressures, but these underlying issues will remain."
In total, 301 profit warnings were issued by UK-listed businesses in the first quarter of the year, almost equal to the entire number issued in the whole of 2019 (313) and five per cent higher than the total for 2018 (287).
Although 77 per cent of profit warnings blamed Covid-19 in the first quarter of 2020, it is worth noting that significant parts of UK plc were struggling before the pandemic.
In January 2020, EY recorded warnings had increased by 43 per cent year-on-year, when compared to the same month last year.
Mr Hurd added: "We know from previous crises that one of the biggest tests comes when companies need to reflate balance sheets, restock inventory and depend on supply chains that have been similarly tested.
"This time, companies face a unique set of additional challenges as they work to safeguard business continuity and the health of employees and customers. It is wise for companies to take a slow and steady approach to restarting operations that allows for flexibility, so they can react to continued uncertainty for some time to come."
