East Midlands business leaders have confidence in the strength of the economy and in the growth expectations for their own business – despite high operating and people costs and the expectation of additional taxes later this year, according to data from Grant Thornton UK’s latest Business Outlook Tracker.
Key indicators from the survey of East Midlands mid-sized businesses show that business leaders are optimistic about the UK economy, with 88% of respondents expressing a positive outlook.
Though UK labour statistics in June reported falling vacancies and increased unemployment – recruitment investment intentions remain strong, with 88% of businesses expecting to either increase or maintain investment in recruitment over the next six months.
Mid-market businesses regard high operating and staffing costs as a significant challenge, potentially exacerbated by the increases in employer National Insurance and National Minimum Wage contributions introduced in April.
Among East Midlands respondents, 80% said these changes had caused them to reduce or freeze hiring, and 78% said they had to cut jobs. The majority (82%) also expect further tax increases before the end of the year.
Despite these pressures, businesses feel supported by government strategy: 86% of respondents agree government policy promotes economic stability; 72% agree government policy supports business growth; 78% agree that the Industrial Strategy will support the growth of their business; 90% of the mid-market businesses expect revenue growth for the next six months to remain steady; 70% expect profits to increase in the next six months.
The positive outlook aligns with findings from Grant Thornton’s East Midlands 200 2025 report, which tracks the region’s fastest-growing companies. These 200 businesses have collectively generated over £10 billion in revenue and achieved an average profitability growth of 33%, demonstrating the region’s underlying economic strength.
Matt Buckingham, practice leader for Grant Thornton UK in the Midlands, said: “East Midlands businesses have grown used to operating in uncertain conditions. From Derby’s advanced manufacturing to Nottingham’s thriving tech and life sciences sectors, the region continues to push forward despite ongoing pressures – from global trade disruptions to shifting domestic policies.
“That’s not to say it’s without difficulty. Rising costs, particularly following April’s National Insurance and Minimum Wage increases, remain a concern. And while there’s a sense of cautious optimism around government direction, many anticipate further tax burdens ahead.
“Still, the region’s businesses are pressing on with plans for growth. Recruitment remains a priority, and we’re seeing firms respond with agility – reviewing pay structures, managing pricing, and investing strategically to maintain performance.
“These trends are evidenced in our East Midlands 200 2025 report, which highlights the strength and determination of the region’s fastest-growing companies. Despite continued headwinds, the East Midlands’ entrepreneurial spirit is clearly as strong as ever.”
