Are Mid-Sized Firms Driving Growth In The UK Economy?

Grant Thornton Study Highlights Rise Of "The Forgotten Middle"

17.03.2014

Steven Beahan, Partner | +44 (0)114 294 7868

It is too easy to overlook the huge importance of mid-sized businesses (MSBs) in the UK, a new Grant Thornton report has suggested.

The study showed firms from the nation's "forgotten middle" are currently reporting turnover of £712 billion, which is a 7.5 per cent increase year-on-year.

Importantly, this is higher than the 6.5 per cent annual turnover increases recorded by large corporations.

Additionally, Grant Thornton stated that MSBs contribute almost the same amount of gross value to the economy as the real estate and financial sectors combined.

Despite the tough trading conditions, the number of mid-sized firms operating in the UK has risen by five per cent since 2007, which is streets ahead of large and small business growth.

With the Budget set to be delivered this week (March 19th), many industry organisations have urged chancellor George Osborne to make provisions to help companies to expand.

However, even without any extra help, it seems MSBs are set to flourish this year.

Grant Thornton has forecast turnover to rise by a further five per cent in the next 12 months, while the organisation believes average export growth will be up by 4.4 per cent. This would be ahead of the average four per cent increase expected across the entire business spectrum.

More MSBs are also in a position to hire new staff, with an extra 68,000 positions set to be filled in the coming year.

Grant Thornton UK chief executive officer Scott Barnes explained why Britain's mid-sized enterprises have been performing so well.

"The shape and size of these businesses meant they were able to navigate the economic storm of recent years better than the rest of the market, and have made the most of the few growth opportunities that were out there," he commented.

"Impressively, they've been doing so with relatively limited government or peer support, and with little recognition of their efforts."

Expert Opinion
Irwin Mitchell has never underestimated the importance of mid-sized businesses to the economy and we welcome this report.

“This group of businesses certainly deserves praise for continuing to increase turnover during the difficult economic conditions of recent years, but what they really need is support to ensure that they can move to the next level and contribute towards providing sustained economic growth within the UK.

“It will be interesting to see what the chancellor has up his sleeve in The Budget for all businesses. Just because MSBs have consistently grown during the downturn is no reason not to support them now.”
Steven Beahan, Partner