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UK mid-market business optimism remains subdued

New research from Grant Thornton’s International Business Report (IBR) finds that optimism amongst the UK’s mid-sized businesses1 (MSBs) remains subdued, up to just 13%2 from 10% in H2 2018. This comes as widespread uncertainty around the world has dented global business confidence, from 39% in H2 2018 to 32% - the lowest global level for three years.

The research found that UK businesses are generally scaling back on investment, with only 6% of businesses planning to increase their investment in new buildings. This is down from 8% in H2 2018 and the lowest level recorded since Q4 2010. Investment expectations in plant and machinery also remain subdued, dropping from 19% of businesses expecting to increase investment (H2 2018) to 15%. In contrast, UK businesses’ investment intentions in technology are much healthier, with 38% of businesses expecting to increase investment in this area (from 33% H2 2018).

Globally, the number of businesses expecting to increase export levels remained steady at 21%. However, the UK saw a slight dip as the number of businesses expecting to increase their export capacity in the next twelve months dropped from 20% (H2 2018) to 18%.

Businesses around the world are still citing economic uncertainty as the main constraint to growth, with 46% pointing to this as a concern (from 49% in H2 2018). In the UK, 54% of businesses noted this as their biggest constraint (from 59% in H2 2018).

However, growth prospects remain stable with the number of businesses in the UK expecting to increase revenue levels in the next twelve months rising from 31% in H2 2018 to 38% in H1 2019.

More than half of UK businesses (52%) also reported revenue growth above 5% over the past 12 months. Similarly, almost one-third (30%) had grown their staff levels by more than 5% in the past year. This suggests that businesses are reaping the benefits of adapting to the uncertainty of recent years, having employed a clearer focus on their core strengths and spotting prudent diversification opportunities.

Dave Munton, partner and leader for mid-market at Grant Thornton UK LLP, commented: “With a new Prime Minister set to be announced just 99 days before the Brexit deadline, uncertainty remains the only certainty as we are still no closer to an agreement on what Brexit will look like. This is undoubtedly having an adverse impact on business confidence, which has remained notably depressed since the 2016 EU referendum. With a ‘No Deal’ Brexit looking more likely than ever, we know that many MSBs are preparing for this outcome, as waiting for politicians to reach an agreement is no longer an option for most businesses, who need to prepare themselves for the months and years after 31 October.

“Organisations should structure for agility and make business continuity plans for a No Deal Brexit as the most immediate and most disruptive scenario; look for opportunities that this may create; and get match fit, focusing on business basics like cashflow, retaining and attracting talent, sweating company assets to meet customer need, and removing unnecessary costs. This is what we are already working on with our clients and many are now implementing their contingency plans; it’s not too late to start. Above all else, businesses need to brace themselves for continued change and position themselves to capitalise on any opportunities this may present.”


  1. Grant Thornton’s International Business Report surveyed respondents from 510 UK companies with revenue between £15m-£1bn, in May and June of 2019.
  2. Figures represent net balance percentages (e.g. total who responded ‘very’ or ‘slightly’ optimistic less total ‘very’ or ‘slightly’ pessimistic).