Back to main menu
Search
Search
Overlay
  • Mid-market businesses record fastest growth in output for three months in December (53.3), with growth driven by service sector sales
  • SMEs record flat growth in Q4 2024 (average of 50.1), which largely reflected a downturn in manufacturing output
  • Businesses face fastest rise in input prices for eight months, driven by strong wage pressures

 

Business activity at mid-market companies rose at the fastest pace in three months in December, linked to growth in sales, the first NatWest Mid-market Growth Tracker has found.

The recently published report ‘The Critical Middle’ highlighted the lack of regular trackable data surrounding mid-market businesses. In response and thought to be the first of its kind, this new NatWest tracker uses the industry standard Purchasing Managers Index to provide an ongoing view of mid-market sentiment and business performance across the UK. The index shows that mid-market corporates significantly outperformed the rest of the UK economy in December and were buoyed by a rebound in service sector output. The index posted 53.3 in December, up from 50.3 in November and above the 50 threshold separating growth and contraction for a thirteenth successive month.

Strong growth in mid-market firms’ output at the end of the year contrasted with a downturn in SME output in December. The NatWest SME Growth Tracker recorded 48.7 in December, following marginal growth of 50.5 in November. The report also highlights how different sectors have responded differently to the time of year and changing economic factors. The mid-market service sector rebounded after having stagnated in November. Yet in contrast, December data pointed to the first drop in manufacturing production at mid-market firms since April 2024.  Lower levels of SME output in December largely reflected a marked downturn in SME manufacturing production (index at 41.1), while service sector activity was broadly unchanged (49.9) and construction output increased marginally (50.2).

 

Sebastian Burnside, NatWest’s Chief Economist, said:

“Mid-market firms were the standout performers of 2024, proving themselves to be significant growth drivers for the UK. These firms ended the year in solid growth territory, with strong sales in the service economy boosting their performance and offsetting lower manufacturing output."

"SMEs found the final quarter more challenging, with business activity falling to its lowest level in over a year. This largely reflected a downturn in the manufacturing sector, which has keenly felt the impact of lower demand and rising costs."

"Large and small firms have reduced their headcounts in recent months, amid softer inflows of new work and concerns over rising payroll costs.”

 

Robert Begbie, CEO of the NatWest Commercial and Institutional franchise, said:

“Mid-market businesses, are an essential engine of UK economic growth. Despite making up just 0.5% of UK companies, they are responsible for more than a quarter of national turnover."

"With this new growth tracker monitoring their progress, we are now able to visualise the huge opportunities and challenges they face. For thirteen successive months these businesses have posted growth, but, like smaller businesses, they face rising business costs and an uncertain economic landscape."

"As the UK’s biggest bank for business, we see first-hand the ingenuity and resilience of businesses of all sizes – and there is no ‘one size fits all’ approach. Given inflation and tax changes, managing costs and delivering efficiencies will be key for all businesses as they head in 2025, and as a bank we stand ready to support them every step of the way.”  

 

New work

Total new work at SMEs dropped at the fastest pace for 14 months. SMEs commented on subdued business and consumer spending at the end of 2024, largely due to squeezed customer budgets and stagnating UK economic conditions. There was a marginal rise in overall new business volumes across the mid-market segment in December.

 

Employment

Overall staffing numbers at SMEs and mid-market firms fell in December, with businesses noting that higher payroll costs, including rising National Insurance contributions from April 2025, had weighed on recruitment.  

 

Input prices

Strong wage pressures led to the fastest rise in overall input costs at UK private sector SMEs and mid-market firms for eight months (since April 2024). Prices charged inflation meanwhile hit a nine-month high for SMEs as firms sought to limit the squeeze on their margins.

 

Business confidence

Business confidence dipped slightly in recent months, noting that not all businesses feel the same – confidence and activity depends on geography, sector and individual circumstances. However, SMEs and mid-market businesses remained positive about the overall business outlook for the year ahead.  

 

Media contact
Lucy Chislett
Media Relations Manager
0797486900
lucy.chislett@natwest.com

NatWest UK Business Growth Tracker

Download the NatWest UK Business Growth Tracker

Business Growth Tracker

Notes to editors

About the NatWest UK Business Growth Tracker

The NatWest UK Business Growth Tracker is a quarterly report, designed to monitor business performance at UK small and medium-sized enterprises (1-249 employees) and mid-market corporates (more than 249 employees). Results are compiled from responses to S&P Global UK Purchasing Managers’ Index® (PMI®) surveys. We also track sustainability actions across five main categories.

The panel of around 850 small and medium-sized enterprises and 200 mid-market enterprises is stratified by detailed sector, based on contributions to GDP.

Survey responses are collected by S&P Global in the second half of each month and indicate the direction of change compared to the previous month. A diffusion index is calculated for each survey variable. The index is the sum of the percentage of ‘higher’ responses and half the percentage of ‘unchanged’ responses.

The UK Business Growth Tracker indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. The indices are then seasonally adjusted. Indices are compiled for a range of survey variables, including business activity, new orders, employment, input costs, prices charged, suppliers' delivery times and future activity.

The UK Business Growth Tracker data for December were collected 05 – 20 December 2024. Composite data are available from January 1998. Manufacturing data are available from January 1992, Services data from July 1996 and Construction data from April 1997.

For further information on the PMI survey methodology, please contact economics@spglobal.com.

About NatWest

NatWest serves customers in England and Wales, supporting them with their personal, private, and business banking needs. NatWest helps customers at all stages in their lives, from opening student accounts, to buying their first home, setting up a business, and saving for retirement.

Alongside a wide range of banking services, NatWest offers businesses specialist sector knowledge in areas such as manufacturing and technology, as well as access to specialist entrepreneurial support.

About S&P Global (NYSE: SPGI)

S&P Global provides essential intelligence. We enable governments, businesses and individuals with the right data, expertise and connected technology so that they can make decisions with conviction. From helping our customers assess new investments to guiding them through ESG and energy transition across supply chains, we unlock new opportunities, solve challenges and accelerate progress for the world.

We are widely sought after by many of the world’s leading organizations to provide credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help the world’s leading organizations plan for tomorrow, today. www.spglobal.com.

Disclaimer

The intellectual property rights to the data provided herein are owned by or licensed to S&P Global and/or its affiliates. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without S&P Global’s prior consent. S&P Global shall not have any liability, duty or obligation for or relating to the content or information (“Data”) contained herein, any errors, inaccuracies, omissions or delays in the Data, or for any actions taken in reliance thereon. In no event shall S&P Global be liable for any special, incidental, or consequential damages, arising out of the use of the Data. Purchasing Managers’ IndexTM and PMI® are either registered trade marks of S&P Global Inc or licensed to S&P Global Inc and/or its affiliates.

This Content was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global. Reproduction of any information, data or material, including ratings (“Content”) in any form is prohibited except with the prior written permission of the relevant party. Such party, its affiliates and suppliers (“Content Providers”) do not guarantee the accuracy, adequacy, completeness, timeliness or availability of any Content and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such Content.  In no event shall Content Providers be liable for any damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with any use of the Content.

The information contained in our press releases is intended solely for journalists and media and should not be used by consumers to make financial decisions. Terms and conditions apply to any products or services mentioned in our press releases.

Related press releases

All stories & press releases
scroll to top