Small businesses across the North of England are forging ahead with expansion plans despite ongoing economic challenges, with nearly three-quarters actively pursuing growth initiatives, according to new research from Novuna Business Finance.
The latest Business Barometer study reveals that 71% of UK small businesses are focusing on strategies to drive growth in the coming months—a notable increase from the previous year. This determination comes amid ongoing geopolitical instability, inflationary pressures, and potential US trade tariffs affecting UK and EU markets.
Growth Momentum Across the North
The study, based on responses from 1,315 small business owners, highlights a strong upward trend in investment across key northern regions, including the North West, Yorkshire & Humberside, and the North East.
In Yorkshire & Humberside, the proportion of businesses actively working on growth initiatives surged from 58% in Q3 2024 to 72% in Q1 2025. Similarly, the North West saw a rise from 64% to 72%, while the North East experienced an increase from 54% to 63% over the same period.
Key Industries Leading Expansion Efforts
Nine sectors reported a significant rise in businesses prioritizing growth. Among the standout industries:
- Media & Marketing: Growth-focused businesses rose from 75% in Q3 2024 to 86% in Q1 2025.
- Leisure & Hospitality: Increased from 63% to 81%.
- Real Estate: Jumped from 55% to 72%.
- Legal Services: Up from 57% to 75%.
- Transport & Distribution: Rose from 69% to 76%.
Other sectors, including Manufacturing, IT & Telecoms, and Construction, also reported high levels of engagement in expansion efforts, reflecting broader industry-wide investment trends.
Strategies for Sustainable Growth
Small businesses are employing a range of strategies to sustain and accelerate growth, including:
- Cost management: 55% are focused on keeping fixed costs down.
- Cash flow improvements: 33% are prioritizing financial liquidity.
- Stronger payment enforcement: 26% are tightening payment collection policies.
- Market diversification: 23% are expanding into new domestic and international markets.
- Investment in equipment: 19% are purchasing new assets to enhance productivity.
- Financial reassessment: 15% are reviewing funding and finance commitments.
Joanna Morris, Head of Insight at Novuna Business Finance, emphasized the significance of these efforts. “At the start of the year, fewer small businesses were optimistic about growth. It’s encouraging to see so many now taking active steps to invest in their future, particularly in the face of global economic volatility and supply chain disruptions.”
Long-Term Resilience Amid Economic Pressures
Findings from Novuna’s Small Business Outlook 2025 report underscore a focus on long-term financial resilience, particularly in industries such as construction, transport, and leisure.
The construction sector, grappling with rising costs and financing challenges, continues to prioritize expansion. Likewise, businesses in transport and distribution remain focused on growth despite concerns over shifting economic policies. Meanwhile, the hospitality sector, which has faced prolonged uncertainty, is seeing renewed confidence—87% of businesses now anticipate growth in 2025, up from 80% in the previous quarter.
A Positive Trajectory Despite Market Uncertainty
Despite external pressures, including inflation, supply chain constraints, and international trade concerns, small businesses in Northern England remain steadfast in their commitment to growth. The latest data suggests that rather than scaling back, many are adopting proactive strategies—streamlining costs, securing financial stability, and exploring new market opportunities—to navigate an unpredictable economic landscape.
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