Member Article

Accountants find recession hits hard

The worst of the recession is yet to come for many UK companies, Ernst & Young has warned in a particularly gloomy report.

Profit warnings in the North East more than doubled in the first quarter of 2009, according to research from the accountancy company.

Nineteen profit warnings were issued in the North East and Yorkshire, up from eight in the last three months of 2008. This is the second highest number of warnings the region has issued in the last nine years.

The firm says that as the downturn persists more businesses further down the supply chain will be hit.

Mark Hatton, Newcastle senior partner at Ernst & Young, which compiled the survey, said: “The region’s level of warnings has accelerated in this quarter, as the effects of the recession now start to bite into the engineering and support services industries.

“It is not just the number of warnings that concerns us: the tone of company statements has also darkened. The prospects for 2009 appear more uncertain and gloomy. Green shoots will find it hard to flourish in such stony ground.”

Ernst and Young’s report shows that there were 117 profit warnings across the UK in the first quarter of 2009, the highest first-quarter number since 2001. It was the third quarter in a row that more than 100 profit warnings were issued.

This was posted in Bdaily's Members' News section by Ruth Mitchell .