Manchester’s mid-sized businesses are taking tough decisions on staffing and pay as they battle rising costs – but they remain upbeat despite challenging economic circumstances, new research has shown.
Grant Thornton Ƶ’s latest Business Outlook Tracker shows businesses are “responding proactively to rising employment costs”.
In December last year, shortly after Rachel Reeves’ Budget announcement, 39% of businesses polled said they planned to reduce or freeze hiring in the next six months. That figure has now risen to 84%.
The proportion of businesses looking to pass those rising costs on to customers has also risen over the same period, from 27% to 65%. Meanwhile those polled said they were also reconsidering pay increases, bonuses and employee benefits.
But despite those challenges, optimism rose in Manchester, with 70% of mid-sized firms polled in the city region expressing optimism about revenue growth prospects for the next six months, up from 67% in December.
Meanwhile 81% of business leaders expected profit increases over the next half-year, up from 64% in December.
That contrasted with the national figures from 200 larger businesses polled, who were less optimistic about the Ƶ economy and about their profit hopes.
Carl Williams, practice leader at Grant Thornton Ƶ in the North West, said: “Beyond the numbers, what we're seeing across Manchester is the remarkable adaptability that makes our region such a vibrant business hub. Local business leaders are making tough but necessary decisions today that will protect their growth trajectory tomorrow.
"Manchester’s diverse economic landscape, from manufacturing and energy to tourism and services, gives our mid-sized firms a distinct advantage in terms of agility compared to larger corporations that may be more exposed to international volatility. Many companies in Manchester have already weathered challenging economic conditions and are now emerging stronger and more confident about future prospects.
"This positive sentiment isn't just reflected in spreadsheets – it's evident in conversations we're having with business leaders from Manchester city centre to Old Trafford who are actively investing in their future despite cost pressures. As we approach the Spring Statement, Manchester’s businesses will be watching closely, but the practical, can-do attitude demonstrated by our region's mid-market suggests they're well-positioned to navigate whatever challenges lie ahead."
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