In the next edition of Grant Thornton’s series on trending international insights, we examine how a shifting economic landscape can offer the mid-market an opportunity to grow while their larger counterparts opt to ‘wait and see.’
The global economic outlook for the remainder of 2025 paints quite a mixed picture. Growth is now expected to slow considerably, with the OECD downgrading its forecast from 3.3% last year to 2.9%, and it could drop further if barriers to trade or prolonged policy and geopolitical uncertainty continue to affect markets.[i]
Mid-market businesses are also feeling the strain, with export and international revenue expectations down by 3.0% and 4.2% respectively, according to Grant Thornton’s International Business Report (IBR).
Despite this, many mid-market business fundamentals remain robust – almost two thirds expect to increase turnover this year (66.1%), with a similar proportion expecting to increase profitability (63.1%).
We also see an uptick in businesses anticipating an increase in selling prices (54%) – these strong indicators underscore the mid-market’s resilience, adaptability and strategic strength. These qualities could be vital in unlocking new opportunities created by ongoing global uncertainty.
The shift towards increased tariffs and trade restrictions on imports by the US administration – and subsequent retaliatory tariffs – have led to heightened trade tensions between the US and many of its key partners, most notably the EU and China, contributing to rising economic uncertainty in the mid-market (up 5pp to 60.5%).
While we have seen markets recover well from similar global volatility in recent years, particularly in advanced economies, these key strategic shifts across global supply chains run the risk of becoming more permanent.[ii]
These challenges have prompted a surge in activity around finalising new trade agreements, which are slowly beginning to reshape how we view global commerce:
The EU and India are nearing the finalisation of a Free Trade Agreement, aiming to enhance economic cooperation.
GCC-China Free Trade Agreement negotiations have been fast tracked in a bid to facilitate and enhance trade amidst the threat of further tariffs and rising uncertainty.
The African Continental Free Trade Area (AfCFTA) holds the potential to significantly boost intra-African trade, with projections suggesting a 50% increase by the end of 2025.[iii]
We’re also continuing to see marked regional differences across areas such as interest rates, with the Fed’s cautious stance leading to the largest policy rate gap between it and the European Central Bank in over two years.[iv] All these shifts are driving uncertainty. However, they could also lead to strategic openings appearing, allowing an agile and resilient mid-market to pivot, invest and capture emerging market opportunities.
Mid-market businesses in Europe and South America, for example, are both expecting increases in exports this year (now at 49.3% and 58.5% respectively), while the North American mid-market is expecting a 5pp increase in the number of countries they sell to – the opportunities are there.
These shifting trade routes coupled with growing regional differences have prompted a reaction from some of the world’s largest companies. Major expansion plans are being put on hold and there’s now a distinct internal focus.[v] Ongoing global trade conflicts, election-driven volatility in key markets and the slower-than-expected recovery in major economies have all added to this cautious approach.
However, this overly cautious environment creates distinct opportunities for the mid-market. The faster decision-making cycles and stronger appetite for selective risk that underpin the mid-market make these businesses uniquely positioned to act while others are pausing.
First-mover advantages in newly accessible or typically underserved markets could now be available to the mid-market as global trade continues to shift beyond traditional markets and trade partners.[vi]
While larger enterprises hesitate, mid-market firms can step into this void and benefit from larger competitors being overly cautious. A proactive stance could help reignite a contracting global economy, with the mid-market at the very forefront.
To help the mid-market take advantage of these opportunities, we suggest a five-point plan mid-market businesses can follow to enhance stability, amplify resilience and kickstart growth:
Prepare and run detailed scenario models tied to key trade routes. Model impacts on cost, access and compliance for multiple possible outcomes, based on issues such as a continued tariff pause or the expediting of proposed trade agreements.
Growth is only sustainable when it’s underpinned by resilience. Review and update the business’s operating model to ensure it’s able to flex. Modular logistics, a diversified customer base, flexible supplier networks and focused leadership can all help you respond quickly to shifts in trade or regulatory policy.
The next generation of trade agreements are increasingly focused on services and digital trade. This presents a huge opportunity for businesses that identify and prioritise trade corridors that remove non-tariff barriers for services or digital products. Indeed, 63.3% of mid-market tech businesses are expecting to increase the number of countries they sell to within the next 12 months. Tools such as the OECD Services Trade Restrictiveness Index are helpful guidance.
48.6% of mid-market businesses cite supply chains as a chief constraint. However, taking advantage of advancing trade agreements could help unlock smoother cross-border transit of goods and materials. Use these trade agreements as a framework to formalise and strengthen supply chain relationships in strategic markets. Consider leveraging dual sourcing to enhance agility even further across newly advantageous regions.
Mobility frameworks and R&D collaboration are both increasingly central aspects of modern trade deals and present the opportunity to explore R&D incentives and new talent exchange mechanisms within active or pending trade agreements. Think beyond goods, and look to access new skills, ideas and partnerships across borders to create long-term advantages.
As larger firms continue to adopt a ‘wait and see’ approach, mid-market businesses are well-positioned to lead the next wave of international growth. Their size and flexibility give them a unique edge in navigating uncertainty and capitalising on the short-term volatility that continues to define the current global economy.
Through strong market intelligence, detailed scenario planning, diversifying supply chains and engaging well locally, the mid-market can help chart a path out of economic malaise and spearhead a new wave of targeted, profitable and sustainable growth.
Look out for more regular content in our “Trending Topics” series. For more tailored support or guidance on navigating the current trade environment for your own business, connect with one of our dedicated International Business Contacts today.
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i. OECD lowers global outlook as Trump trade war hits US growth - Reuters
ii. Sustaining The Recovery - IMF
iii. Africa’s regional ambitions and global trade realities – Economist Impact
iv. Fed tests limits of 'wait and see' - Reuters
v. Risks to euro area financial stability from trade tensions – European Central Bank
vi. Global trade in 2025: Resilience under pressure – UN Trade and Development