Fashion
Mid-market surge lifts UK business confidence at end-2025: NatWest
Mid-market firms reported solid growth in December, supported by stronger order books, planned recruitment and healthier sales pipelines, alongside expectations of a broader economic pick-up this year. The improvement aligns with recent Office for National Statistics data showing the UK economy grew 0.3 per cent in November, NatWest said in a press release.
The growth among mid-market firms was broad-based, with manufacturing recording an index of 51.1. Businesses linked higher activity to rising new orders, and new product launches, and an influx of customers.
UK PMI data for manufacturing and services rose to 55.3 in December, signalling faster expansion, as per NatWest’s UK Business Growth Tracker.
Private sector activity ended 2025 stronger, led by mid-market firms reporting solid output growth, healthier order books, and improved confidence for 2026.
SMEs remained under pressure, though declines eased, amid persistent cost inflation.
In contrast, small and medium-sized enterprises (SME) continued to face challenging conditions. While small and medium-sized enterprises business activity remained in contraction territory, the pace of decline eased in December. Economic uncertainty, including the late November Budget, was cited as a factor delaying customer decisions and hiring plans. Employment levels at SMEs fell for a 15th consecutive month, although the rate of job losses softened.
Cost pressures intensified across the board, with SMEs experiencing the fastest rise in input costs since last April, driven by higher food, staffing and raw material expenses. Mid-market firms also reported a pick-up in input cost inflation, reaching a seven-month high. Efforts to protect margins led SMEs to raise output charges at the strongest pace in five months, while mid-market companies increased selling prices at their fastest rate since last August.
Sebastian Burnside, chief economist at NatWest, said businesses are entering 2026 with greater certainty and improving confidence. He noted that mid-market firms closed 2025 with a strong surge in sales, maintaining momentum despite fiscal uncertainty, while SMEs remain hopeful that easing inflation will gradually reduce cost pressures.
Andy Gray, managing director of commercial mid-market at NatWest, highlighted the segment’s economic importance, noting that even modest growth among mid-market businesses could add significantly to UK gross value added by 2030. He said NatWest will continue working with industry leaders and government to unlock further growth potential.
Overall, business expectations for 2026 improved, with confidence strengthening across the mid-market, reinforcing its role as a key engine of UK economic growth.
Fibre2Fashion News Desk (SG)