Mid-sized businesses defy Brexit uncertainty
Advisory firm calls for ambitious economic engine to be put at the heart of post-Brexit ‘new economy’
Figures released today by BDO suggest that the UK’s mid-sized businesses are proving more resilient to Brexit uncertainties than their large or small counterparts.
Data analysis completed by the accountancy and business advisory firm has revealed that these businesses – typically made up of mid-market, AIM-listed and private-equity owned organisations – have grown turnover by 11% in the months since the June 2016 EU referendum from £122bn to £135bn.
In contrast, large and small organisations saw turnover contract by 2% from £380bn to £371bn and by 11% from £12bn to £11bn respectively.
BDO adds that mid-sized businesses – which it refers to as the ‘UK’s economic engine’ – also enjoyed profit growth a year on from the referendum. Based on a snapshot of figures reported in July 2017, collective profit grew from £83bn to £103bn – an increase of 22%. This outpaced FTSE 350 firms, whose combined profits fell by 7% from £108bn to £100bn. Small companies enjoyed a profit increase of 14% from £15bn to £17bn.
Policy gap
Despite the economic engine’s strong financial performance – and the fact it’s responsible for one in four private sector jobs – BDO has warned of a policy gap.
“Mid-market businesses are the unsung middle of the UK economy yet they are too big to benefit from incentives aimed at SMEs and too small to grab attention like FTSE companies, meaning entrepreneurial mid-sized businesses fall into a policy and profile black hole,” commented Stuart Lisle, BDO Partner and Chair of the Brexit Taskforce. “Yet, it is these ambitious businesses that drive the economy and will have a key role to play in the success of the UK’s post-Brexit future.”
BDO is calling for the economic engine to be placed at the heart of a post-Brexit ‘new economy’ that focuses on regional balance and sustainability. Policies around tax simplification, infrastructure investment and improving access to skills all feature as part of BDO’s New Economy report, and would play a major role in helping the UK’s mid-sized businesses grow and create jobs, it says.
“Government must now, more than ever, put the needs of these businesses at the heart of their post-Brexit planning,” continued Lisle. “Measures such as creating a simplified tax system, investment in the right infrastructure projects and improving access to skills would all have a major part to play in further boosting the opportunities of our mid-sized businesses helping them create jobs and economic wealth. But it will also help the other sectors to be more successful too.”
The top 10 firm recently announced the promotion of 1,110 people.