New product demand supports confidence among West Midlands firms heading into 2025
More than nine in 10 (95 per cent) private business owners in the West Midlands are confident of delivering growth in 2025, according to KPMG UK’s first ever Private Enterprise Barometer.
The new poll 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 per cent) of respondents.
Looking ahead, almost two thirds of businesses (65 per cent) in the region now have plans to diversify through new products or services in the next five years.
Similar numbers (61 per cent) plan to target international expansion in the same time period.
With KPMG and UKTN’s recent report on artificial intelligence (AI) identifying opportunities to grow the West Midlands’ industrial sector by £9bn over the next 10 years, the new Barometer points to private enterprises seizing the initiative.
Firms in the West Midlands said they were the most likely in any region to invest in AI in the future (83 per cent of firms vs the national average of 73 per cent).
However, securing and developing the necessary skills for businesses to capitalise on the opportunities continues to represent a challenge.
Less than half (49 per cent) of firms in the West Midlands are confident of being able to recruit people with the right qualifications and experience for their business – the lowest ranking nationally.
With fewer than a fifth (17 per cent) of firms having difficulty access funding, it’s notable that private equity and capital markets were seen as the most popular sources of funding to support long-term diversification – ahead of bank debt.
Andrew Bostock (pictured), Birmingham office senior partner at KPMG UK, said: “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.
“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.”
