Some mid-market firms still in recession while others prosper, report finds

BUSINESS leaders in mid-market construction firms consider their sector to still be in recession while their counterparts in consumer goods, IT, telecoms and media see an improvement.

According to a report by accountants and business advisors Grant Thornton 56% of chief executives and chief financial officers say that their sector is still experiencing economic turmoil.

In construction 87% of respondents said that their sector was in recession while 58% of those working in industrials and chemicals saw their sector contracting.

By contrast 71% of respondents in fast moving consumer goods (FMCG) said that their sector was recovering followed by 63% who saw growth in technology, media and telecommunications (TMT).

Ian Marwood, corporate finance partner at Grant Thornton in Yorkshire, said the survey showed a bounce back in sectors with more flexible business models.

More than two thirds of respondents (67%) stated that cost reduction had been a high priority underpinning their business strategy over the past 12 to 18 months while 58% said it was growing market share.

Meanwhile 64% said they intended to focus on growing market share in the with only 59% seeing cost reduction as the number one priority underpinning their business strategy in future.

Mr Marwood said: “Mid-market firms are shifting their focus from cost reduction to growing their market share. Most seek organic growth, but more than a quarter expect to complete mergers and acquisition deals in the coming 18 months.

“Although there has been a significant rise in the cost of debt supporting expansion plans it is encouraging to see the mid-market companies resuming their growth plans.”