Private enterprise is feeling positive about growth
Despite what’s looking to be a tough year ahead, businesses are confident about their growth prospects in the next 12 months, says Euan West
Everyone in the business world is talking about growth in 2025, but the big question on everyone’s lips is whether we will achieve it.
Whether being used in a positive or negative way, the word is dominating the agenda. From efforts to boost the UK economy by the Labour government to the plans of US President Donald Trump being set out on the global stage, every news article, piece of rhetoric or business announcement seems to be about growth.
And, no matter where you look, everybody has a different opinion on it. Some positive, some negative, but all have something in common – a recognition that it will shape almost all parts of our lives, work and personal, during this year and many years beyond.
That is why we launched our first ever Private Enterprise Barometer, to ask over 1,500 private business owners across the entire country for their views on growth.
And I was happy that, in what is likely to be another tough year, the response was really encouraging, with the vast majority of businesses showing resilience and casting a positive outlook for 2025 and beyond.
The annual poll showed that 92 per cent of firms across a range of sectors including professional services, finance, technology, industrial manufacturing and retail are confident of their growth prospects in the next 12 months.
Increased demand for products and services was cited as the main reason for this confident outlook, followed by overseas expansion.
Business owners also have a positive longer-term outlook. More than two thirds (69 per cent) plan to diversify over the next five years by launching new products and services, with more than half planning to fund this from their own balance sheet. Of those looking to secure external funding, 41 per cent will do so via private equity.
Most respondents are bullish when it comes to geographical expansion, with 63 per cent planning to enter new overseas markets in the coming years. The main targets for expansion are Europe and North America.
The challenges ahead
But there is also a realisation that not all things can be positive and there are a range of challenges that lie ahead. Those businesses with lower degrees of confidence also highlighted difficulties such as increased competition and access to funding as limiting factors.
The UK government has an ambitious programme to kickstart growth – but how will this impact businesses? How significant will a rise in employers’ National Insurance and changes to Business Property Relief be for private businesses? Further afield, will global trade wars intensify, and what impact could steep tariffs have on the UK economy?
It is clear there are plenty of questions and unknowns.
But, on the whole, businesses have started this year with an optimism that should help drive positive results from an energised sector determined to succeed.
Altogether, private businesses are offering a combined picture of resilience, opportunity, ambition and entrepreneurial drive.
Hopefully, the current mood from private business will ensure that, when we look back at 2025, growth continues to be an important word for the year and something many of us managed to achieve.
Euan West, Head of KPMG Private Enterprise in the UK and EMA