The majority of Midlands mid-sized businesses have returned to pre-pandemic revenues, two years after seeing sales fall.
According to new research from accountancy and business advisory firm BDO LLP, nearly a third of regional businesses are generating the same level as they were before COVID-19, with 46% increasing revenues.
Despite the financial recovery, the region still faces considerable challenges, with the biggest threat to growth over the next three months being supply chain challenges (28%). The ongoing impacts of Brexit, such as complicated customs legislation, also ranked highly in the Midlands.
As a result, ongoing issues are preventing companies from prioritising other important issues, with 25% of Midlands businesses sharing they feel unable to support employee wellbeing and 29% admitting they are pausing investment in the business.
Tim Foster, partner at BDO in the Midlands, said: “To see such a high number of companies return to pre-pandemic revenues demonstrates the resilience and ambition of mid-sized businesses in the region.
“However, the fact remains that the economic landscape is still fraught with challenges – some unique and some very much intertwined with the pandemic. Unsurprisingly, COVID-19 ranks as the number one issue that has adversely impacted businesses in the last two years. As such, the culmination of challenges is leading many to pause investment in the business, or seek external finance or investment to counteract current trading conditions.
“However, businesses in the Midlands continue to support their people, with many implementing measures to support staff with the rising cost of living. According to the survey, 64% of regional businesses have increased wages in line with or ahead of inflation, while others have offered staff benefits, such as a one-off bonus or childcare support.”
Foster added: “Despite the fact businesses in our region continue to face a range of pressures and have paused some types of investment as a result, it’s hugely encouraging to see the majority are investing in people and doing what they can to support their teams with the cost-of-living crisis.”
