The North West business landscape is demonstrating remarkable resilience as new figures reveal a significant downturn in profit warnings across the region. According to the latest EY Profit Warnings Stress Index, listed companies in the North West issued just 12 profit warnings during the first half of 2024, representing a dramatic 40% decrease compared to the same period last year.
This positive trend places the North West among the best-performing regions in the UK, with only London and the South East recording fewer profit warnings. The substantial reduction signals growing stability and confidence among businesses operating across Greater Manchester, Merseyside, and the wider North West area.
What's Driving the Improvement?
Several factors appear to be contributing to this encouraging development. Sam Woodward, EY's UK Turnaround and Restructuring Strategy Leader for the North, highlights that businesses are adapting more effectively to the current economic environment. "Companies have been proactively managing their cost bases and strengthening their operations," Woodward explains.
The data suggests that North West businesses are navigating economic headwinds with increasing sophistication, having learned valuable lessons from previous challenging periods. This improved corporate resilience is translating into more stable financial performance across multiple sectors.
Broader Economic Context
The regional improvement mirrors a national trend, with UK-listed companies overall experiencing their lowest first-half profit warning total since 2016. However, experts caution that challenges remain, particularly for consumer-facing sectors.
Woodward notes that while the reduction in profit warnings is encouraging, businesses must remain vigilant. "The economic environment continues to present difficulties, and companies need to maintain their focus on operational efficiency and strategic planning," he advises.
The positive performance in the North West reflects the region's diverse economic base and the adaptability of its business community. As companies continue to navigate the post-pandemic landscape, these figures provide encouraging evidence of growing corporate stability in one of England's key economic regions.
