The 2025 Monahans South-West Market Research Report

The 2025 Monahans South-West Market Research Report: Business Sentiment across the region after a change in Government and significant Autumn Budget

The last six months or so have been interesting to say the least. The UK’s first Labour Government in 14 years. A significant Autumn Budget. An ever-changing economic landscape.

So, where does this leave businesses in the South-West?

In June 2024, before the General Election, we conducted research to gauge business sentiment. Now, in early 2025, we have revisited the market to see how businesses are adapting to new political and economic realities.

Our research, conducted by Atomik Research among 303 senior decision-makers from businesses with up to 500 employees has shown that while political change has influenced business confidence, the biggest economic challenges remain the same, and only those who take proactive steps will thrive.

The General Election: Has it made a difference?

Businesses have not rushed into change, despite a shift in Government. Instead, most are adopting a ‘wait-and-see’ approach:

• 38 per cent of businesses say the General Election has improved market conditions.
• 35 per cent report no change.
• 27 per cent believe conditions have worsened.

The impact of the General Election varies by sector.

The technology (69 per cent) and finance (46 per cent) sectors have seen the most improvement, likely due to increased investment incentives and Government support for digital transformation.

Meanwhile, wholesale and retail (73 per cent) and manufacturing (50 per cent) report worsening conditions, driven by rising inflation, supply chain disruptions, and weakened consumer spending.

The bottom line? The election has not been the seismic shift some expected, but for struggling sectors, inaction is not an option.

A tale of two businesses: Who is thriving, and who is struggling?

While overall business confidence remains relatively stable, with businesses rating their optimism at 7 out of 10, this average hides differences across sectors and business sizes.

For example, 52 per cent of larger businesses (251-500 employees) feel the election has had a positive impact, while only 15 per cent of micro businesses (1-10 employees) feel the same, with 38 per cent saying conditions have worsened.

It shows that smaller businesses are feeling the squeeze, particularly in sectors hit by inflation and cashflow challenges. Those that fail to adapt will find it harder to survive.

The biggest threats to business in 2025

The challenges facing businesses are not new, but their impact is deepening.

Inflation and rising costs appear to be the biggest challenge, cited by 47 per cent of all respondents, but particularly severe in agriculture (58 per cent) and construction (53 per cent).

Cashflow struggles are the most pronounced in wholesale & retail (55 per cent) and manufacturing (33 per cent), where supply chain disruptions and late payments remain issues.

Possibly due to skills shortages, a major issue for the retail sector is recruitment and retention, with 39 per cent of respondents in the survey highlighting this. The healthcare sector (44 per cent) echoes this sentiment.

Digital transformation & data security was found to be a growing concern for the finance sector (26 per cent), reflecting an urgent need for cybersecurity investment and compliance with evolving regulations.

Those that fail to address these issues will fall behind.

The ones that embrace efficiency, strategic hiring, and financial resilience will gain a competitive edge.

Financial resilience: The gap between small and large businesses is widening

Despite challenges, more businesses are reporting financial growth:

• 58 per cent say they are in a stronger position than a year ago (up from 56 per cent in 2024).
• Turnover growth has improved, with 52 per cent seeing an increase, averaging 34 per cent growth.

But this growth is not evenly distributed. 63 per cent of larger firms have seen turnover growth, compared to just 26 per cent of micro businesses.

Bigger businesses are proving more resilient, while smaller businesses risk being left behind.

Survival in 2025 depends on adopting smarter financial strategies.

Employment: Stability, but at a cost

Hiring has not collapsed, but smaller businesses are struggling to grow their teams:

• 35 per cent of businesses increased their headcount (almost unchanged from 34 per cent in 2024).
• 29 per cent made redundancies, with mid-sized firms (51-250 employees) hiring at much higher rates than micro businesses.

The recruitment challenge is real. Businesses that cannot compete on salary must focus on retention and flexible working solutions to secure talent.

What should businesses do next?

The businesses that are thriving are those that are adapting. To stay competitive, firms must focus on three key areas:

• Master cashflow management – Review costs, improve operational efficiency, and forecast financial risks before they become critical.
• Adapt to market conditions – Keep a close eye on policy changes and utilise new tax reliefs, funding opportunities, and Government incentives.
• Invest in workforce planning – Hiring challenges won’t go away, so businesses need smart retention strategies to keep talent and manage costs.

We are working closely with businesses across the South-West to help them strengthen financial resilience and seize new opportunities.

If you want to discuss how to protect your business from economic uncertainty, get in touch with our team today.

Simon Tombs