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Mid-sized firms spearhead growth… but warning signs remain

But there are warning signs, with a slight drop in turnover indicating that firms are still facing barriers to growth.

The government must do more to support growing businesses, says Grant Thornton director Giles Mullins.

The firm’s analysis shows that as a whole, UK MSBs delivered a 4.9% rise in gross profits during 2014 compared to smaller firms at 4.4% and larger corporates at 3.8%.

MSBs also reported a higher average salary growth of 2.3% against 2.1% for small firms and 2% for larger businesses.

Furthermore, capital investment spending for MSBs was up 3.4% in 2014 compared to 2.4% and 2.8% for small and large companies respectively.

However, while MSBs across the East of England have performed extremely well, there has been a flattening in turnover, indicating these companies are still experiencing barriers to growth and more support is needed to help them achieve their full potential.

In 2012, turnover levels for East of England MSBs stood at £57.9 billion, rising to £62.2 billion in 2013. However, during 2014, turnover levels fell back slightly to £59.9 billion.

Mr Mullins (pictured), director at Grant Thornton’s Milton Keynes office, said: “MSBs in Milton Keynes have done fantastically well through the recent global financial downturn, and continue to outperform the market across many important metrics, supporting our view that dynamic MSBs are critical to driving both the county and UK’s economic growth.

"Of continued concern however, is the flattening of turnover for East of England MSBs and also falling productivity levels among MSBs across the UK as a whole.

“Our research found that one quarter of MSBs highlighted a lack of skilled talent as a major constraint to their continued success, as well as regulation and red tape, and economic uncertainty. If MSB growth continues to be weighed down by factors such these, it could impact their contribution to the UK economy.

"These results should raise a red flag to the government and despite some welcome measures introduced in the Autumn Statement earlier this month, more needs to be done to support these businesses, particularly looking at skills, exports and incentivising businesses to invest and innovate.”