Despite experiencing a decline in the last year as a result of ongoing Brexit and Covid-19 uncertainty, the UK’s mid-market has grown over the last five years, according to new research from business advisory firm BDO.
Medium-sized, PE-owned and AIM listed businesses, what BDO calls “the economic engine”, increased revenues by nearly a quarter over the last five years, to more than £1.3tn. This compares to growth of 4% for FTSE 350 businesses.
It said economic engine businesses have also continued to create new jobs, increasing employee numbers by a third over the last five years, to eight million. Smaller businesses increased employee numbers by more than a third (36%) to two million, compared with FTSE 350 businesses that saw a reduction of 16% in employee numbers to almost five million.
Looking ahead to future growth, a separate survey of 500 medium-sized businesses carried out by BDO revealed that almost a quarter of businesses plan to carry out mergers and acquisitions activity as their primary growth strategy in the next 12 months.
This was particularly high in the real estate and construction and manufacturing sectors where almost a third (32%) of businesses plan to merge with or acquire new businesses.
The same survey also found that Asia was the largest region for international growth for more than a quarter (28%) of mid-sized businesses in the next year. This rose to more than a third (34%) for manufacturers. Asia was closely followed by the US as the largest international growth region for 23% of businesses with 11% planning to focus international growth in Europe.
Ed Dwan, partner at BDO said: “The last five years haven’t been an easy ride for businesses. Years of Brexit uncertainty coupled with the shock of the pandemic and subsequent lockdowns have left no business completely unscathed, but mid-sized businesses have continued to show their resilience and manage the impact of incredibly difficult economic conditions.
“The next few months will continue to be challenging for businesses as they face higher costs, major supply chain disruption and now the outbreak of the new Omicron COVID-19 variant.”
He added; “The Government is walking a careful tightrope between protecting the health of the UK and sustaining our economic recovery. Looking ahead, the role mid-sized businesses will play in the overall economic recovery of the UK should not be underestimated.”