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Mid-sized manufacturers top £50bn in overseas revenues
Mid-sized manufacturers generate more revenues from international operations than any other sector, with overseas turnover surpassing the £50bn mark this year, according to analysis published by accountancy and business advisory firm BDO.
Sales from overseas subsidiaries have increased 25% in the last five years, which has added an additional £10bn to revenues generated by UK mid-sized manufacturers. In the last financial year, revenues have grown another 10% to almost £50.1bn.
Consumer markets (retail, wholesale and leisure) and professional services are the next biggest sectors, with mid-market companies generating revenues of £30bn and £23.2bn respectively in other countries.
Tom Lawton, partner and head of manufacturing at BDO, said: “The manufacturing industry has not been without its challenges in the last five years but it continues to prove its resilience and agility in the face of economic and political uncertainty. We have been championing the importance of the mid-market for many years and these figures show the importance of this segment to the UK economy.
“Although Brexit and the approach of our politicians to negotiations has dampened confidence and investment intentions, manufacturers have continued to keep their focus on key business opportunities.
“We have seen many mid-sized manufacturers strengthen their overseas networks including expanding or establishing subsidiaries in Europe to help deal with the issues that might arise from Brexit – soft or hard. These companies have not wanted to leave their international growth plans in the hands of Brexit negotiators.”
The BDO analysis singles out at the mid-market, which the firm describes as the UK’s ‘economic engine’. This includes mid-sized business (typically with a turnover between £10m-£300m), PE-backed and AIM-listed companies.
Lawton adds: “Our focus is on the mid-market because these businesses deserve to be celebrated and championed. For far too long, mid-sized companies have been overlooked and under-valued.
“They are driving growth in the UK economy. They are growing faster than big corporates and small businesses. They’re creating more jobs too. The Government is missing a trick by not recognising the strength of our mid-market; they are the ignored-middle of the business world and this needs to change.”
Lawton’s comments are supported by BDO’s research. According to the firm’s New Economy report, mid-sized manufacturers are expanding overseas at a quicker rate than small (sub-£10m turnover) and large (FTSE) businesses.
“The Government cannot afford to ignore the strength of our mid-market nor can it lose focus on the importance of UK manufacturing as we endure the twists and turns of EU negotiations. Without ‘picking winners’ or drifting into quasi-nationalisation, we do think that a long-term, practical Industrial Strategy that delivers a positive trading environment and supports growth and innovation is hugely important for the future of manufacturing. ”