Manchester firms delay growth plans amid volatility

Mid-sized and larger firms in Manchester are struggling to adapt to economic and policy volatility, according to new research. Many have slowed investment and delayed strategic moves despite broader headlines about growth in the city-region.

A survey commissioned by accountancy and advisory firm Menzies found that 90% of Manchester respondents said their organisations were not adapting quickly enough to rising costs, shifting policy and rapid technological change. The study is based on 49 senior decision-makers in Manchester and forms part of a wider poll of more than 500 UK business leaders at companies with 50 or more employees.

The results contrast with reports of an accelerating local economy and a £3bn spending plan framed around "good growth". Respondents described a more uncertain operating environment, with the prospect of policy change shortening planning horizons and delaying investment decisions.

Missed openings

One in five Manchester firms said they had missed a major opportunity in the past 12 months because they could not move quickly enough. Management attention also appeared to be pulled towards immediate pressures: 16% said their organisations were stuck "firefighting", while a further 20% said they were too focused on responding to threats rather than identifying new opportunities.

Many also reported cutting spending that would usually strengthen resilience and responsiveness. Over the past year, 31% said their businesses had scaled back training and development, and the same proportion reported cutbacks in cybersecurity and resilience infrastructure.

Other areas of retrenchment included international expansion and AI and digital transformation, both cited by 22% of respondents. A fifth reported reduced activity in M&A and partnership deals, while smaller numbers pointed to reductions in office and real estate footprints.

Capital pressures

Financial constraints were a prominent theme. More than a quarter cited cash flow and budgeting difficulties as a major constraint, while 20% pointed to increased energy costs.

Asked about the biggest external risks over the next 18 months, respondents most often cited increased regulation (28.57%). UK economic stagnation and rising trade protectionism both ranked at 24.49%, followed by currency volatility (20.41%) and energy costs (20%).

Funding availability was also a recurring concern. In the Manchester sub-sample, 29% said restricted access to private equity had slowed their organisation, and the same proportion cited limited access to external bank loans or credit facilities. Another 29% pointed to diminishing sustainability and green finance initiatives.

Other forms of finance also appeared difficult to secure. More than a quarter said venture capital and crowdfunding or community investment were out of reach. Nearly a quarter said emergency support schemes were not accessible, while 18% cited government grants.

People and process

Beyond finance, the research highlighted workforce and organisational issues as major constraints on rapid response. People-related factors accounted for eight of the top ten barriers cited by Manchester respondents.

Training and development was the most frequently cited internal area under strain, with 31% saying plans had stalled. Recruitment challenges also featured as 18% reported difficulties making senior strategic hires, and the same proportion cited wider workforce recruitment.

Respondents also pointed to internal decision-making and leadership alignment as key to their ability to respond. Nearly half said faster decision-making processes would improve agility, and a similar share identified stronger leadership alignment on key priorities.

Short-term thinking was another constraint. Around 22% said a focus on short-term goals was hampering agility. One in five cited conflicting leadership views, while 22% pointed to poor communication and collaboration.

Regulatory clarity

Regulation featured both as an external risk and an area where firms wanted clearer guidance. Some 41% of Manchester businesses said clearer rules and guidance from regulators would improve their crisis response.

The research also linked regulatory change to wider uncertainty. Nearly a third said rising regulation was undermining organisational agility, while skills shortages were also identified as an issue.

Simon Massey, managing partner at Menzies, said the findings highlighted the cost of delay during periods of uncertainty.

"Right now, too many UK businesses are stuck in 'wait and see' mode - waiting for the Budget, waiting for the economy, waiting for international politics to settle. But as our research shows, the result is that too many are missing the opportunity to innovate and grow," Massey said.

He also said firms could take practical steps internally even when external conditions remain volatile.

"Businesses can't control what's going to be in Rachel Reeves' red box, but they can control how resilient, agile and prepared they are for whatever may be around the corner. There's no secret to business agility, but it's near impossible if a business doesn't have a clear destination and a direction of travel understood by every level in the organisation," he said.

The Agile Advantage report examines barriers to agility across financial management, systems and processes, and leadership alignment, and sets out ways businesses can respond to changing conditions.