Mid market businesses are showing ‘remarkable resilience’ by investing in people and productivity to rebuild profit margins, according to an economic index which focuses on the sector.
A middle market business index from audit, tax and consulting firm RSM, has risen to 131.4 in the first quarter, up 16 points, and the largest rise since the index began. It shows businesses are more positive about the outlook with 39 per cent saying the economy has already improved, and 54 per cent expecting it to improve over the next quarter. Almost half of businesses say their net profits are already up compared to last quarter, while 60per cent said they expect net profits to increase over the next six months.
Laragh Jeanroy, office managing partner in Cambridge and Bury St Edmunds at RSM UK, said: "The rise in businesses expecting the economy to improve suggests renewed positivity, but we are not out of the woods yet. East Anglian business leaders should plan for another drop in economic growth, and working capital management is key to weathering the storm. Leaders in the region should also focus on the recovery in the second half of the year, as businesses that invest in their people and productivity now will be best placed to benefit from the upswing when it arrives.” Over half (59 per cent) of middle market businesses plan to increase capital expenditure and investment over the next six months, and a similar share expect to increase turnover.