Confidence among Midlands mid-sized companies has rebounded, according to new research from accounting and business advisory firm BDO.
In its bi-monthly survey of over 500 mid-sized business leaders, more than half (58%) of regional businesses are confident about their growth prospects over the next 12 months, up from 35%, as reported by BDO in June.
While conditions remain difficult, the findings suggest many mid-market companies in the region are seeing out the year on a firmer footing after a prolonged period of pressure and uncertainty, positioning 2026 as the year when AI investment comes to the fore.
2025 has been a year of transition, according to the Economic Engine survey, with nearly three-quarters (71%) of companies now actively investing in AI and a further 29% exploring how it could support operations.
The focus has shifted, from whether to adopt new tools, to how to embed them effectively across the business. For example, more than three-fifths (62%) now use AI daily in their tax processes.
Many have adjusted hiring as they rebalance operations around AI and new technologies: 71% of companies hired fewer people overall, while a smaller group (26%) maintained headcount but for different roles.
Looking ahead, 2026 is expected to mark a new phase as AI reshapes workforces more visibly. Nearly three-quarters (72%) of businesses plan to keep overall headcount steady but change the mix of roles.
A further 9% expect to increase hiring, while nearly a fifth (17%) expect to hire fewer people. The figures suggest that AI is prompting a gradual shift in skills and responsibilities as companies integrate it more deeply into their operations.
As the Midlands mid-market looks to consolidate in this area, attention is turning to the Autumn Budget. Regional mid-market leaders are calling for stability and a policy framework that supports investment and cost control, rather than sweeping reforms.
When asked which measures would most support growth, companies prioritised practical cost relief: targeted incentives to cut energy and input costs topped the list at 30%, followed by business rates reforms (19%), reduced National Insurance contributions (19%) and clearer R&D reliefs (17%).
A quarter (25%) of Midlands mid-sized companies want a three-year moratorium on business tax changes, a signal of how highly companies value predictability.
Kyla Bellingall, regional managing partner at BDO in the Midlands, said: “The Midlands mid-market has absorbed several years of economic uncertainty and is now showing real resilience. Confidence is rebounding, investment in technology is becoming routine and companies are rebalancing rather than retreating.
“For regional companies investing in technology and reshaping operations, the ability to plan with confidence is now critical. There is a strong desire among businesses for no further changes to taxation at the Autumn Budget to encourage investment. What the mid-market in our region needs is consistency from government: a stable policy environment that turns momentum into lasting growth.”
