Supply chain disruption and rising energy and transport costs remain the biggest threat facing Britain's mid-sized businesses, although there are signs that pressure on investment plans is beginning to ease, according to research from BDO.

The accountancy firm's Mid-Market Tracker found 46 per cent of businesses expected supply chain pressures combined with higher fuel and energy costs to be their biggest challenge over the next six months.

The survey of 500 companies with annual revenues between £10mn and £500mn found manufacturing, construction and hospitality and leisure businesses were among those facing the greatest pressure because of their exposure to complex supply chains and high operating costs.

However, companies appear somewhat less pessimistic than earlier in the year. BDO previously found that 60 per cent of mid-sized businesses planned to pause investment following disruption associated with the Middle East conflict. That proportion has since fallen to 40 per cent, although more than a third of companies expect to pass additional costs on to customers.

Businesses are also attempting to reduce their exposure to energy and supply chain volatility. More than a third plan to cut energy consumption, while 41 per cent intend to accelerate investment in low-carbon technology.

Companies have also been reconsidering where they source goods and components. Previous BDO research found 30 per cent were prioritising UK suppliers, with a similar proportion considering onshoring or nearshoring manufacturing to shorten supply chains.

Richard Austin, partner at BDO, said companies were being forced to balance investment ambitions against persistent cost pressures.

"Many firms are taking positive steps but they are also forced to continue to make difficult decisions around investment and pricing," he said. "Increasingly, we're seeing firms focus on efficiency, resilience and reducing their exposure to external shocks."

The mid-market represents a significant part of the UK economy. According to BDO, mid-sized companies generate more than 40 per cent of private-sector revenues and employ 11.1mn people, equivalent to more than a third of private-sector jobs.

One in five businesses surveyed said the government should prioritise measures to address supply chain disruption.

BDO has called for a review of eligibility for energy cost relief schemes and improvements to electricity grid access for manufacturers. It also wants greater government support for technology investment through measures such as matched funding, innovation loans and enhanced capital allowances.

Austin said such measures would help mid-sized businesses "invest with confidence and accelerate growth across the UK".