Barriers to international expansion and responding to pressures related to sustainability are the top challenges facing mid-market businesses in the Midlands over the next six months, according to BDO’s latest survey of 500 mid-sized businesses with turnovers between £10m-£300m.
Exporting products or services overseas has become a top challenge facing one in three mid-sized businesses (31%) due to disruption from delayed deliveries and stock shortages.
In addition, 46% say they need better support from the Government to begin or continue exporting abroad. This includes broadening access to UK Export Finance support to the mid-market, new Free Trade Agreements and simpler customs rules to aid the export of products or services overseas.
Responding to pressures related to sustainability such as changing consumer demands and government commitments to net zero is also a significant worry for 34% of businesses in the region.
Meanwhile, rising workforce costs such as National Insurance contributions (NICs) and the Living Wage, which both increase next month, are a concern for nearly one in four (24%).
As almost nine in ten mid-sized companies (87%) brace for further cost increases in 2025, 37% will have to delay pay rises for their teams.
Midlands businesses say incentives would be useful to help upskill or recruit more staff whilst they address skills shortages and workforce costs rise. Nearly a quarter (22%) recommend making the Growth and Skills Levy accessible to career changers.
Despite these challenges, mid-sized businesses remain resilient and are still striving to grow. A third of Midlands businesses are planning to invest in new technologies such as AI or automation to make their business more efficient or digitalise existing products or services.
Kyla Bellingall, Regional Managing Partner at BDO in the Midlands, said: “It’s encouraging to see such a high proportion of regional businesses still planning to invest in new technologies despite the challenges they face around international growth and increased costs.
“Mid-market companies are the engine room of the Midlands economy – providing one in three private sector jobs and contributing significant domestic investment. Creating the right operating environment for the mid-market to deliver growth must be high on the agenda for Government and business leaders alike.”
