Pic: Shutterstock
Despite making up less than 1 per cent of all UK businesses, the mid-market is expected to contribute 41 per cent of cumulative total GVA growth in the next three years, highlighting the critical role these businesses will play in meeting the government’s ambitious growth targets, according to new forecasts released by accountancy and business advisory firm BDO.
As the government continues to consult on its ten-year modern industrial strategy, BDO has urged policymakers to consider the importance of the mid-market to economic growth and jobs creation, and to ensure the strategy enables these businesses to unlock their full potential.
Mid-market businesses will generate significant increases to GVA contributions in every region of the country by 2028. The professional services sector is projected to be the largest contributor to both GVA (£260 billion) and employment (2.4 million jobs) within the mid-market by 2028, reflecting the UK’s status as a leading professional services hub, BDO said on its website.
Manufacturing is forecast to be the second largest contributing sector, with mid-sized manufacturers expected to generate £132 billion in GVA.
“The government’s growth agenda relies on the success of the engines of growth. Our mid-sized businesses need targeted support from the government - access to capital, a simplified tax regime and skills programmes. Only then can they unlock their potential and deliver growth to every corner of the country,” said Scott Knight, head of growth, strategy and international at BDO.
The research analyses the performance of mid-sized firms, the UK’s economic engine and calls for several policies to aid its growth, including streamlining taxation and increasing access to capital.
Last year, the annual average GVA growth rate for all businesses was projected at 1.9 per cent between 2024 and 2027. In contrast, mid-sized businesses have recorded a 6.4 per cent annual growth rate over the past five years, highlighting the vital role the mid-market plays in driving the UK’s economic growth.
Current mid-market businesses are also expected to play a significant role in job creation, providing an anticipated 1.9 million additional jobs since 2023, taking the total number of jobs within this segment to 10.3 million by 2028. Last year the turnover of these businesses had grown to £1.6 trillion (~$2.02 trillion), equivalent to more than half of the value of UK GDP. Revenue generated overseas by these firms now sits at £130 billion, BDO added.
Region-wise, the most substantial contributions are forecast to come from London and the Southeast, with GVA contributions growing by a quarter to £160 billion and £105 billion respectively by 2028. Elsewhere, mid-sized businesses are expected to increase their contributions by 21 per cent in the East Midlands, West Midlands and the Northwest (delivering £77 billion, the highest value outside of London and the Southeast).
Fibre2Fashion News Desk (SG)