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Lancashire Times
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1:01 AM 7th January 2025
business

North West Businesses Set Out Plans To Tackle Biggest Challenges In 2025



Image by Tumisu from Pixabay
Image by Tumisu from Pixabay
Supply chain pressures and higher taxes are two of the biggest challenges facing North West businesses in the year ahead, as companies set out growth plans for 2025.

According to the latest research from accountancy and business advisory firm BDO LLP, nearly a third of regional mid-sized businesses (32%) rank supply chain challenges as one of their top concerns over the next 12 months, as delayed materials and a lack of supply continue to hinder businesses. Fall-out from the Autumn Budget is also a significant challenge for nearly two-fifths of North West companies (38%), with higher rates of tax, including National Insurance Contributions (NIC), likely to impact on cost bases in 2025.

BDO’s bi-monthly Economic Engine survey of 500 mid-sized businesses – companies with a turnover of between £10m-£300m – has shown that alongside supply chain issues, growing complexities around exporting overseas are proving to be a real headache for 44% of regional businesses, as companies try to stay ahead of complicated customs rules and new tariffs in receiving countries. Later this month this could intensify, with the United States expected to impose new US trade tariffs; however, the impact on UK exports is still unclear.

Angela Cross
Angela Cross
Angela Cross, regional managing partner at BDO in the North West, commented:
“Political and economic headwinds have continued to create a difficult trading environment for many regional businesses in 2024. However, with inflationary pressures stabilising and interest rates starting to reduce, the focus for the year ahead will be on addressing those challenges and focusing on where growth can be delivered.

“Undoubtedly, this will result in adjusting pricing strategies, with more than third of North West businesses (38%) admitting that costs will inevitably be passed onto the consumer. For more than a quarter (26%), greater financial support will be required to cover additional overheads, with nearly one-fifth of regional businesses (18%) looking to develop specific roles as they move towards greater adoption of technology to drive genuine productivity gains.”


Despite the challenges facing regional businesses, BDO’s survey has shown that more than half of mid-sized businesses (53%) feel in a stronger position compared to the start of the COVID-19 pandemic five years ago, with 50% of North West companies planning to invest between £3m-£5.5m over the next two to five years in order to scale their business.

Cross added:
“There’s no doubt that the Autumn Budget has added an additional layer of pressure for many businesses; however, what it has done is provide a degree of certainty about how the UK economy will look in the coming years. Based on this foundation, companies intend to focus investment on adopting new technologies and upskilling staff in areas such as artificial intelligence and automation. For some, this extends to advanced equipment and machinery, with expanding into new overseas markets also a top investment intention in the coming years.

“Investing in new technologies like AI and automation is clearly a significant priority for regional businesses, whether it’s driven by developing new products or services, or centred around recruitment and training. One thing is very clear, central government needs to throw its weight behind mid-sized businesses – the engine of our regional economy – if these businesses are going to succeed and that can only be achieved by introducing policy and taxation that supports their strategic ambitions.”