RUTH SUNDERLAND: Mid-size businesses still shine despite Iran war
The long weekend brings no respite from fears over what might happen next in the Middle East.It has become all too clear that even if cargoes could start moving freely through the Strait of Hormuz immediately, economies will be feeling the ill-effects for a very long time.In the UK, confidence among business leaders has been driven to a new record low, according to the Institute of Directors. High Street sales have imploded because fears of Trumpflation are making people reluctant to spend. Firms are worried about inflation and disruption to supply chains. To cap it all, the Easter Bunny is liable to be drenched by Storm Dave.Despite this, there are reasons to be hopeful in the longer term about UK businesses and the economy. Honestly, there are, it's just that we don't hear much about the backbone of solid mid-market firms or the entrepreneurs who refuse to be daunted.When I recently moderated two panels at the Business Leader Summit on growth, it was like entering an alternative universe, with an unmistakeable crackle of positive energy in the air.The entrepreneurs taking part founded businesses in sectors including tech, property, artisan gin, fashion, clean energy, electric vehicle fleets and loan agency services. Talking the talk: Labour and Tory politicians should note that successful entrepreneurial mid-market firms are often in constituencies likely to be most vulnerable to Nigel Farage's ReformNo one was oblivious to the harsh external realities. Mid-market companies, however, have been performing surprisingly well and, if politicians are serious about wanting to create growth, this is where to look.Around 70 per cent saw their turnover grow between 5 per cent and 20 per cent last year, according to NatWest bank, and virtually none saw a decline. Rival HSBC identifies a similar phenomenon. Its Corporate Tracker report found median turnover had grown an impressive 10.5 per cent a year from 2021 to 2024, markedly better than the overall growth in the economy.Both studies looked at periods before the Iran war erupted, and they show high levels of resilience in mid-market companies that will stand them in good stead.Entrepreneurial mid-market firms are outperforming the economy as a whole because GDP is being dragged down by its weakest elements, including a stagnant public sector. Their productivity growth is more than twice the rate of start-ups and large listed firms. Many are also far away enough from the Westminster hand-wringing to avoid becoming terminally depressed.Often deeply rooted in their communities, they are key to levelling up the regions and reviving left-behind areas. Labour and Tory politicians should note that these are the constituencies likely to be most vulnerable to Reform. In a phase of capitalism rife with speculation and bubbles, we can cheer ourselves up by remembering the solid mid-market firms determined to beat the gloom.Retail crimeTwo years ago, our sister paper The Mail on Sunday launched an anti-shoplifting campaign after Tesco boss Ken Murphy spoke to me about the wave of theft, violence and abuse in his stores, with workers routinely having to wear body cameras.He told me then that retail crime is 'a scourge on society, and an insult to shoppers and retail workers. It is time we put an end to it'. Yet two years on, Marks & Spencer executives are complaining about mobs in London that have menaced its stores. Retailers feel some police forces trivialise store theft and abuse. Shoppers are already tightening their belts in anticipation that prices will rise due to the Iran war.The last thing we need is for our beleaguered high streets to turn into no-go areas where customers are too scared to shop.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
Share or comment on this article:
RUTH SUNDERLAND: Mid-size businesses still shine despite Iran war
