Mid-market company in the Mid-South aims to grow in 2026 and is focusing on AI and productivity to support expansion plans.
Improving productivity and implementing technology such as AI will play a key role in helping mid-sized businesses achieve their growth goals over the next 12 months, with 44% of regional business leaders citing them as one of their main sources of growth in 2026, according to new research from accountancy firm BDO.
The survey of 500 midsize business leaders also found that growth through new products or services (41%) and M&A or partnerships (41%) are also key growth drivers for Central South businesses this year.
Against a backdrop of deteriorating overall economic confidence and a weak job market, the region’s mid-sized market appears to be bucking the trend, with the majority (82%) of regional companies looking to increase headcount and strengthen investment plans in 2026.
However, mid-sized companies remain cautious, with more than half (62%) expecting their headcount to increase by only up to 10%.
Local companies’ hiring intentions reflect separate BDO analysis which suggests mid-market companies could add a further 1.9 million jobs by 2028, taking total mid-market employment to 9.9 million, strengthening the role these companies play in driving UK employment growth.
Investment in technology and new capabilities such as AI is driving headcount growth by 43% for regional businesses, with companies seeking staff with relevant skills in areas such as AI, data and digital transformation. Increased customer demand or new business opportunities
This is another factor driving the 36% increase in adoption among those surveyed.
Looking ahead, nearly one-third (32%) of mid-market companies in the Mid-South are considering asset-based financing to fund their 2026 growth plans.
A further 29 percent are looking to government grants or incentives, and 26 percent are considering using private equity or venture capital investment.
Despite cautious optimism for growth and investment, business leaders in the region remain conscious of the challenges ahead.
Regulatory and compliance requirements are an issue for 29 percent of businesses in the Mid-South, and weak international demand and geopolitical influences are another key risk to 2026 performance for 23 percent of regional businesses.
“Despite the economic turmoil, there is much to be optimistic about in the Mid-South region, with key sectors such as strategic infrastructure, investment zones and aerospace driving regional growth,” said Steve Le Bas, BDO regional managing partner for the Mid-South region.
“Mid-market companies remain resilient, and despite the err on the side of caution, mid-south midmarket companies’ growth ambitions set the bar for 2026.
“The middle market is the UK’s economic engine and key to delivering growth, but cost pressures remain significant.
“Turning ambition into reality will depend not only on business strategy but also on whether the broader business and policy environment enables middle markets to do what they do best: invest, grow and create jobs.”
