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Medium-sized businesses believe the regional economic gap has widened

Medium-sized businesses believe the regional economic gap has widened

COVID-19 will worsen the UK’s north/south economic divide according to a poll of 500 medium-sized business leaders, published today by accountancy and business advisory firm BDO.

  • 72% of mid-sized businesses in The Midlands feel that COVID-19 will further widen the UK’s north / south economic gap
  • Ensuring the wellbeing and safety of their employees is the number one immediate concern for leaders of medium-sized businesses across the Midlands.
  • Businesses in the Midlands are more confident of their current position than elsewhere in the UK with 74% of West Midlands and 67% of East Midlands companies agreeing they will be able to survive a second wave of COVID-19 without additional financial support, compared to a 59% national average.

The latest monthly /Rethinking the Economy /poll from BDO, revealed the biggest concern for businesses across the Midlands as a whole isensuring the wellbeing and safety of their employees. UK-wide the number one concern is cashflow, highlighting regional nuances and the additional challenges companies in areas which have been impacted by local restrictions ahead of the UK lockdown.

The research showed that 44% of East Midlands business leaders are grappling with wellbeing and safety of their employees as the biggest operational challenge and 42% of West Midlands companies are prioritising managing international supply chains as their greatest challenge.

When asked about the biggest threat to their business in 2021, company leaders named paying back business loans (31%) as the most worrying, followed by a market contraction (23%) and slow economic recovery (23%).

72% of Midlands businesses have a Brexit strategy in place, compared to a 63% national average. Half of businesses in the East Midlands will reduce office space or premises in the next six months. Over a third (39%) of West Midlands companies will look at M&A opportunities in the next six months and 39% of those asked are planning to outsource functions of the business such as payroll or finance.

Tim Foster, partnerat BDO in the Midlands commented on the findings:

“Although Midlands business leaders feel the pandemic will magnify the UK’s north/south divide, there is still a feeling of confidence that the Government will keep its momentum in spending and policy plans to level-up the regions.

“It’s clear from this month’s findings is that business owners are looking ahead to 2021 with plans to increase their own resilience through strategies such as reducing office space, outsourcing or planning M&A activity. It’s also encouraging to see so many of our regional businesses with plans in place for post-transition Brexit activities when compared to other regional counterparts.”

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