Small business growth forecasts rise for third consecutive quarter in the West Midlands – as the region bucks the national trend of decline

Furthermore growth forecasts in the West Midlands are rising over consecutive quarters. The percentage of West Midlands-based business owners predicting growth in Q3 2024 stood at 32 per cent. This rose to 40 per cent in Q4 2024 and has risen again this quarter to 42 per cent.

The positive position for small business owners in the West Midlands stands in contrast to the national picture, where the percentage of UK small business owners predicting growth has dipped to a nine-month low (33 per cent), with a four-year high in the percentage predicting contraction or decline (21 per cent).

The findings also open questions about wildly contrasting fortunes for small businesses in the regions that are  home to England’s two principal cities – Birmingham and London. Whilst small business confidence is rising quarter-on-quarter in the West Midlands, London has seen the sharpest collapse in small business growth forecasts - plummeting from 57 per cent to 39 per cent in just three months. This presents a two-year low point in confidence for enterprises in the Capital (lowest level since Q2 2023).

The regional findings are from Novuna Business Finance’s Business Barometer study, which studied the growth forecasts of more than 1,300 small business owners – and has tracked trends every quarter for the last 11 years. Following the Bank of England cutting interest rates and reducing its economic growth forecasts for 2025, the new Novuna Business Finance data reveals that in some regions, small business owners are already gearing up for contraction, with major falls in growth forecasts already registered across many key regions. Compared to other regions, the West Midlands and the North West are the English regions that buck the trend with consecutive rises in growth forecasts. 

Joanna Morris, Head of Insight at Novuna Business Finance comments: “Over the last 11 years, our research suggests that small businesses are remarkably resilient when it comes to their quarterly growth forecasts. Whilst the national average is down slightly, the findings for the West Midlands are very encouraging. From our Business Barometer study over the last decade, it is clear there are often fine margins between businesses that predict growth or contraction and decline. Now is a time for small businesses to be supported, so caution and contraction can be replaced by confidence and belief. We are serious about helping established small businesses put plans in place to achieve their true potential and, midst the market uncertainty, small business confidence this year will be key to the new Government delivering on its pledge to deliver economic growth.”