The West Midlands mid-market is an exporting powerhouse as new research reveals that medium-sized companies account for £1 in every £4 exported from the region.
Despite making up less than 1% of all firms in the region, mid-sized companies are exporting to the value of almost £6.3bn each year and are responsible for 23% of all West Midlands exports, according to accountancy and business advisory firm BDO LLP.
The region is on a par with the East of England, but just behind the North West which has sales abroad totally £6.4bn. However, it has a higher export value than Scotland, Wales and Northern Ireland.
The region’s consumer markets sector – retail, wholesale and leisure – is the most prolific exporter, followed very closely by manufacturers. Between them, they account for almost two third of all goods and services sold to overseas markets (£3.9bn) from the West Midlands.
Professional services is the third most prolific sector for exports, accounting for £850m – half the individual worth of the two leading sectors.
Richard Rose, partner and head of BDO LLP in Birmingham, says medium-sized firms are still under-valued when it comes to their contribution to UK growth and economic recovery.
“Approximately 75% of all mid-market exports take place outside London and South East, yet the government’s focus still lies heavily on the City of London. As policy makers strive to rebalance the economy, it’s important to recognise that regional mid-market firms contribute significantly. What’s exciting, yet equally frustrating, is that they’d have even more growth potential if the right support was in place,” said Rose.
“The appetite for international expansion is there – we saw that in spades at the Export Week events that took place across the region last week. It’s now up to the government to put the right policies in place and give West Midlands companies the tools to thrive.”
As part of its Mid-Market Manifesto, BDO is calling on the government to consider three policy recommendations to help mid-sized businesses make the decision to export more confidently.
These are to introduce a VAT zero rating to companies that supply to qualifying exporters – something that is already in place in Ireland; agree an exemption from local taxes up to a £1m threshold for when businesses open a new branch or subsidiary overseas; and a review of the unintended consequences of the Bribery Act which, by its sheer complexity, is acting as a real regulatory barrier for new exporters.