North West mid-sized businesses are reporting stronger-than-expected performance in 2025, fuelled by new products and services and an improving skills outlook, according to the latest Economic Engine research from accounting and business advisory firm, BDO.
The survey of over 500 mid-sized business leaders shows nearly three-quarters (71%) have already beaten growth targets set at the start of the year, with more than one-fifth (23%) saying they have significantly exceeded expectations.
Better-than-expected staff recruitment and retention (36%) and the successful launch of new products and services (52%) were key drivers of outperformance.
This positive trading picture is translating into continued capital commitment. More than three-fifths (66%) are holding investment steady, with over a quarter (29)% stepping it up. Only 6% are delaying or scaling back UK investment. These figures suggest regional companies are backing their own pipelines and balance sheets, even as wider economic sentiment remains subdued.
Despite their strong performance, confidence in the UK as a place to grow remains limited for some North West businesses. A third (34%) of mid-sized companies surveyed describe the UK as a “strong environment” for long-term business growth, while 66% say conditions have become more challenging. More than one in five (23%) are already shifting operations or investment overseas.
That caution reflects persistent structural pressures. On workforce issues, half (51%) cite plugging skills gaps as their biggest challenge. Rising wage expectations are another significant pressure (17%), reflecting the ongoing effects of inflation and higher National Insurance contributions. Operationally, managing supply chain disruption is one of the most pressing barriers to growth (34%).
To fuel their growth, North West mid-sized businesses are looking to secure new investment or finance (46%) and investing in automation, technology or AI (51%). A further 37% are expanding their physical footprint or operations.
Angela Cross, regional managing partner at BDO in the North West, said: “These findings highlight the strength of the North West’s mid-market – businesses are delivering growth and continuing to invest despite challenging conditions. But they also carry a warning; confidence in the UK as a place to scale is not guaranteed.
“With mid-sized businesses continuing to contribute significantly to the regional economy, creating a wealth of additional jobs to boost the future outlook in the North West, the government will want to use the Autumn Budget to reassure this segment of the market and address persistent barriers around skills, costs and competitiveness. Only with the mid-market firmly and confidently anchored in the North West, will we see the growth the regional economy needs.”
