Mid-market firms punching above their weight
NORTH West mid-market firms are putting in a strong performance, exceeding growth in their category, according to business advisory firm BDO.
New figures published today reveal the UK’s mid-sized businesses – firms with revenue between £10m and £300m – are a thriving area of the UK economy, growing turnover by nearly 55% in the last five years from £0.65 trillion to £1.02 trillion.
In the North West, turnover for mid-market firms grew even quicker at 65% over the last five years reaching nearly £82bn last year.
Over the last Parliament the UK mid-market has outstripped the FTSE 100 in many key areas of performance.
In terms of profitability, the UK’s mid-sized firms can boast profits up 110% compared to a FTSE 100 shrinkage of 3%.
And on employment, jobs growth of the UK mid-market today is almost three times faster than that of the current FTSE 100.
The UK mid-market now employs 50% more people than it did in 2010 (6.1 million jobs in 2014/15). In the North West, mid-market firms also grew fast employing 48% more people than they did in 2010.
With rebalancing the economy the top political priority for the UK Government, through initiatives such as the Northern Powerhouse and the new independent infrastructure commission, BDO is calling for policy-makers to determine a bigger role for the mid-market in their thinking and help this already successful sector expand further.
BDO’s new report – Building the New Economy – suggests three broad areas where the Government needs to focus its policy thinking to make the most of the UK-mid-market, help UK businesses grow internationally and to attract inward investment as well as creating the regional and sector powerhouses which fuel the economy.
Partner and head of BDO in the North West Tim Entwistle said: “Now that we are on the road to recovery, it is essential that we do not repeat the mistakes of the past and perpetuate an unbalanced economy too heavily reliant on one sector or region.
“The Government has started tackling the issues and plans around the Northern Powerhouse, devolving powers to cities and infrastructure investment are all very welcome.
“More can be done though, and encouraging Britain’s mid-market has to be at the heart of Government plans. Yet currently the mid-market falls into a policy and profile gap – too big to benefit from the policies aimed at small businesses and too small to get the attention lavished on FTSE firms.
“We would like to see a ‘new economy’ that harnesses the entrepreneurial spirit of UK businesses and puts the mid-market front and centre of the UK’s growth plans.
“Germany’s Mittelstand is rightly lauded in its own country and it’s time our own ‘Brittelstand’ got the same recognition.”
