Business and Finance
Britain’s mid-sized companies overtake German counterparts by revenues
Research shows there are now more than 35,000 medium-sized firms in the UK, up from 20,000 in the last five years
Britain’s mid-sized companies are now generating more sales than their counterparts in Germany’s Mittelstand, the cohort of businesses often held up as the engine room of Europe’s biggest economy, according to research published on Monday.
Mid-sized companies in the UK are making €1.92 trillion a year in revenues, having expanded 33pc over the past five years. The Mittelstand, meanwhile, has grown 12pc and is now delivering turnover of €1.78 trillion a year.
France and Italy, whose mid-sized companies make up a smaller slice of their economies, are also seeing revenue growth of 16 and 20pc respectively.
These companies now employ 9.3m people in the UK, compared to just under 9.2m in Germany, 3.8m people in Italy and almost 2.5m in France.
BDO, which compiled the figures, defined a mid-sized company as one that had between £10m and £300m of annual turnover. There are 35,299 firms of this size in the UK, compared to almost 44,000 in Germany.
The German ministry of economic affairs defines the Mittelstand more narrowly, only including firms with up to 500 employees and between €1m and €50m in annual sales. This cohort of businesses, which are often family-owned, makes up more than half of Germany’s economic output.
In 2011, the Chancellor George Osborne called on British firms to “learn the lessons of the successful Mittelstand model”. Earlier this month, the Prime Minister David Cameron launched a support scheme for up to 500 smaller companies a year, dubbed Help to Grow.
“Germany has always invested in its mid-market; it has policies directly aimed at the Mittelstand and culturally the Mittelstand stands as the economic backbone of the nation,” said Simon Michaels, managing partner at BDO. “While the UK’s mid-sized businesses are worth more than the Mittelstand for the time being, there is so much more we can do to cement our position as Europe’s mid-market leader.”
Meanwhile, research by Markit for KPMG found that technology companies continued to expand in the final three months of 2014, with a survey showing activity rose from 55.7 to 59.8, increasing further above the 50 mark that separates growth from contraction.
This upbeat assessment by tech companies contrasted with weakening sentiment from UK businesses overall, though with a score of 55.2 remained firmly in growth.
This article was written by Marion Dakers from The Daily Telegraph and was legally licensed through the NewsCred publisher network.
Source The Daily Telegraph