Business Outlook Tracker

Revenue growth

Revenue growth expectations have dropped again in December, a -4pp decrease compared to October 2024, following the steady decline that has been seen across the year. Net 15% of respondents are now pessimistic about ​their revenue growth, which is triple the amount at the start of this year.

Optimism on business revenue growth over next six months

Profit expectations

Profit expectations jumped back slightly in December (+9pp) compared to October but remain significantly below the confidence seen in February this year (-21pp) and -6pp below the rolling average since the Tracker began in January 2021. The percentage of businesses expecting profits to decrease dropped -1pp compared to October, but remains at the second highest level since December 2021, with 43% expecting to see a decrease.

Profit growth expectations over next six months

Schellion Horn, Head of Economic Consulting, Grant Thornton UK LLP said: 

“Our previous Business Outlook Tracker was undertaken just before the Autumn Budget, at a time when the Chancellor was looking to manage expectations around the fiscal challenge ahead so as not to cause too much market instability on Budget day. It might have been expected that business confidence in the economy, investment potential and profitability would rebound after this – however that’s proven not to be the case. 

“Our research indicates that the changes to employer’s National Insurance Contributions and the National Minimum Wage announced in the Budget have hit businesses hard across the board - but particularly small to medium sized businesses. After the last few years of having to manage costs due to high inflation, wage growth and rising interest rates, just when there is light at the end of the tunnel, the market is now faced with further cost increases and the likelihood of interest rates staying higher for longer.  

“Almost half of the medium-sized businesses surveyed now expect their profits to decrease moving forward. The Bank of England has also downgraded its 2025 growth forecasts and warned that interest rates will fall more slowly than anticipated. With this in mind, the focus for businesses of all sizes, but particularly smaller to medium-sized, will continue to be managing costs and streamlining efficiencies where possible. For those looking to access new funding, staying on top of the available grants and investments, such as from local councils, and taking advantage of them where possible could make a real difference to those looking to offset the impact of ongoing cost pressures.”