Mid-sized firms will add two million jobs to UK economy by 2028, BDO says
Mid-sized businesses could add £745bn to the UK economy in the next three years, according to new research by the financial services firm BDO.
Chancellor Rachel Reeves has set out her ambitions to deliver growth “further and faster”, but her plans have come under fire as the Office for Budget Responsibility looks set to halve its growth forecast for 2025 ahead of her Spring Statement.
But new research suggests the Chancellor should look to the UK’s mid-market at this week’s Spring Statement.
Companies with revenues between £10m and £300m, which make up less than one per cent of all businesses across the country, could make up nearly half of the UK’s expansion in gross value added (GVA) by 2028, BDO research suggests.
GVA measures the contribution of a company to an economy and it is often used as a proxy figure for GDP by the Office for National Statistics (ONS).
These businesses could also yet create an additional 1.9m jobs by 2028, according to BDO’s report.
The figures were praised by exports minister Gareth Thomas, who said that mid-sized companies were key to the Labour government’s mission to deliver growth.
“We’re working in partnership with business to ensure they have the right support and recognition to overcome the barriers they face to help them to thrive, create jobs and grow the whole economy,” he said.
Reeves’ Spring Statement is likely to unveil a number of small policies aimed at boosting the UK economy.
But firms are yet to be hit by measures introduced in Reeves’ Autumn Budget, which come into effect next month.
While BDO forecasts manufacturing to be the second largest contributor to the boom seen by mid-sized firms, the sector at large has suffered from uncertainty brought by Reeves’ tax hikes and trade war uncertainty.
Surveys suggest manufacturing is experiencing a fall in output, with industry figures blaming the decline on Reeves’ £40bn tax raid.
Data published by the industry body Make UK suggested that output had fallen in the first quarter of the year for the first time in ten years in an “ominous” sign to the UK economy.
Analysts have also pointed to fears over an escalating global trade war incited by President Donald Trump.
“Manufacturers feel like they are currently wading through treacle, facing barriers and increased costs being imposed on them at every turn,” said Verity Davidge, policy director at Make UK.