South West mid-sized businesses lead the UK in growth of employment rates

Economy & Politics | Employment & Skills | Financial Services | Growth | National | Reports | South West
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Mid-sized businesses in the South West have created more jobs in the last year than the FTSE 350 and small businesses combined.

Accountancy and business advisory firm BDO has published new research into employment rates across the UK.

BDO’s analysis reveals that the South West’s mid-market – businesses with a turnover between £10m – £300m – has seen employment levels grow by 15% – a faster rate than any other region.

The West Midlands and London fall into second and third place, growing jobs in the mid-market by 11% and 9% respectively.

Despite often being overlooked and undervalued by the government, mid-sized businesses in the South West created almost 60,000 additional jobs in the last year – a 14% increase from 416,000 to 474,000.

Smaller businesses experienced an 11% increase, creating 13,000 jobs and bringing total employment to just under 139,000. The 16 FTSE 350 firms in the South West grew jobs at a slower rate of 2%, creating 2000 extra jobs. They now employ a total of 117,000 people.

The national story paints a similar picture of growth for the mid-market. In total, an additional 500,000 jobs were created by mid-sized businesses last year – an increase of 8%. This compares with smaller businesses, which created 100,000 more jobs (+7% increase). FTSE 350 businesses experienced a reduction in jobs nationally, down by 1.2% at a loss of 80,000 jobs.

These high-growth and ambitious mid-sized businesses – which BDO calls the UK economic engine – punch well above their weight. They only account for 0.5% of all UK businesses (29,000) yet they generate over one-third of UK revenue (£1.3tn) and are responsible for almost one-third of private sector jobs.

Despite playing such a pivotal role in the UK’s economic growth, mid-sized businesses risk being overlooked by policymakers according to BDO’s ‘New Economy’ report.

The report outlines five key policy areas aimed at boosting the UK economic engine post-Brexit. Ideas include radically simplifying the UK tax system, creating regional and sector powerhouses, tackling the UK skills gap and increasing productivity by boosting the Annual Investment Allowance.

Paul Falvey, Tax Partner at BDO Bristol, says: “Since the 2016 referendum, there has been a huge amount of economic and political uncertainty for businesses. Despite this backdrop, mid-sized firms are continuing to drive economic growth and create jobs.

“The South West is a great place to live and work. The performance of local mid-sized businesses, and in particular the rate of employment which is growing faster here than any UK region, demonstrates the talent, ambition and resilience of local firms.

“These high-growth, entrepreneurially-spirited businesses are the lifeblood of our economy and warrant significant attention from any government. They are often overshadowed by the largest companies and they fail to get the same attention as small start-ups, but they are leading the way for growth. These businesses should be championed and their successes heard loud and clear.”

Summary of key research

  Employees Latest Year

(National)

Employees Latest Year – 1

(National)

Employees increase %

(National)

Employees Latest Year

(South West)

Employees Latest Year – 1

(South West)

Employees increase %

(South West)

Mid-sized businesses 7.68 million 7.11 million 8% 474,000 416,000 14%
FTSE 350 6.99 million 7.08 million -1% 117,000 115,000 2%
Small businesses 1.66 million 1.55 million 7% 139,000 125,000 11%

 BDO defines the UK economic engine as being a combination of privately owned businesses with a revenue of between £10-£300m, private-equity owned businesses and AIM listed companies. Large businesses were defined as those in the FTSE350 and small businesses defined as those with revenue below £10m.

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