By Daniel Hunter
Despite the double-dip recession and unsettled economic outlook, medium-sized businesses (MSBs) still see the UK as their primary market for growth, according to research by ICAEW.
With a third not planning to export in the next two years, in spite of government initiatives to encourage them to look overseas, many are focused on realising their potential in their home market.
MSBs are defined as companies with turnover between £25-500 million and are a key focus for Government to help drive economic growth. Many are positive about the next two years with 76% expecting turnover growth compared to only 5% expecting reduced turnover. However much of this growth is expected to come from gradual organic growth and concentrating on core markets.
Two thirds of MSBs do currently export and nearly half of them (45%) expect to increase overseas trade. A third do not export and a similar proportion only export up to 10% turnover. Only 6% of non-exporters anticipate doing so in the next two years.
“The MSB sector is important to economic growth and recovery. Whilst it is encouraging that MSBs see potential in the UK market, those that are not trading overseas need to realise the opportunities it could potentially bring to their business," Michael Izza, ICAEW Chief Executive, said.
Business Minister Mark Prisk added: “There is huge potential in our mid-sized businesses. They account for around one fifth of the private sector and are crucial to our plans for growth. That’s why one of the main elements of our mid-sized businesses campaign has been getting these companies to aspire to, and start exporting. “
Over half (55%) of MSB’s are described as ‘sustained growers’, experiencing increased turnover growth in the past three years and expecting growth over the next two. Planned turnover growth is not matched though with a similar growth in staff. Over a third (36%) anticipating turnover growth are not planning to increase headcount.
Nearly two-thirds (64%) of MSBs believe future growth will come from gradual organic growth, with 47% relying on this route solely. There has been no change in strategy, despite the current economic conditions and global competition, and 58% intend to remain with the same routes they have been used to historically, suggesting a lack of aspiration.
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