Confidence in growth prospects running high in West Midlands according to new research

The new poll conducted by accountancy firm KPMG gauged optimism among 1,500 private business owners, including 129 in the West Midlands, across a range of sectors including professional services, finance, technology, industrial manufacturing and retail. 

Firms in the West Midlands posted the second-highest confidence rating of any region, with only private business leaders in the North East more optimistic about their prospects for the year ahead. 

Increased demand for products and services was identified as the main reason for this confident outlook, cited by more than half (54%) of respondents. Looking ahead, almost two thirds of businesses (65%) in the region now have plans to diversify through new products or services in the next five years. Similar numbers (61%) plan to target international expansion in the same time period. 

“The level of confidence among local firms is heartening to see, and reflects the strength of the growth plans they’ve put in place – despite the challenges of recent years," said Andrew Bostock, Birmingham Office Senior Partner at KPMG UK.

“In particular, firms are increasingly turning on to the opportunities presented by AI as familiarity with the technology and its application in a commercial setting grows. However, as this and our other recent research identifies, there is a pressing need for firms not to only invest in their own employees but to link with educators to ensure they are ready to welcome the next generation of talent and unlock growth long-term.” 

Nationally, over 90% of Britain’s private business owners say they are confident of growth in 2025.  

Those businesses with lower degrees of confidence highlighted challenges such as increased competition and access to funding as limiting factors. 

When it comes to areas of planned investment over the next 12 months, technology was ranked as the highest priority (63%), followed by skills and workforce (49%). Of those looking at future tech investment, almost three quarters (73%) plan to invest in AI to improve the customer experience. 

Euan West, Head of KPMG Private Enterprise in the UK and EMA, added: “2024 has been a turbulent year, so it’s pleasing to see that private businesses are showing resilience and casting a very positive outlook for growth and investment in 2025 and beyond.  

“Going into 2025 buoyed by this optimism will help these firms drive results in what will likely be another tough year. Investment in areas like technology and talent will be essential for firms to realise their growth ambitions and make a significant impact on the UK’s economic health.”