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GE Capital Australian Mid-Market Report

Mid-Market Report

GE Capital Australia released its second GE Capital Australian Mid-Market Report, continuing GE Capital's work to increase the understanding of business and policymakers about the Mid-Market (Australian companies with revenue of between AUD$10 million to AUD$250 million).

While the Mid-Market represents only 1.4% of businesses, it provides one third of all business revenues and employs more than 3.2 million workers, so what matters to these businesses, matters to the Australian economy.

In October 2011, GE Capital released the first Australian Mid-Market Report to examine the business landscape across the sector and the picture that emerged was of a small, yet critical sector of Australian business. It was shown to be the most optimistic of all sectors of the economy, and accounted for more than a third of the revenue earned by Australian business.

The middle market: Beacon of optimism

This new report, which tracks the Mid-Market from October 2011 to March 2012, points to some promising trends – particularly an inherent resilience and strength in overcoming a downturn. By February 2012, it was clear that the Mid-Market had lost some of its momentum. CFOs had lowered their expectations for growth in revenue and staffing. Their concerns about the economic environment and the need to manage costs had overtaken growth-related goals like building capacity through growth in labour (finding and keeping staff).

Yet these concerns were short-lived. By March 2012, evidence showed that the downturn in the Mid-Market may have been arrested and early signs of recovery were emerging. At this time, CFOs revisited their growth expectations and were shown to hold fewer concerns about barriers to growth.

Australian economy: Moving at different speeds

The downturn has not been uniform across the Mid-Market, reflecting Australia's multi-speed economy. Industry sectors such as Business & Property and Other Industries have retained a strong focus on growth, and remain largely unaffected by the more difficult economic conditions. On the other hand, Manufacturing, Construction, and Wholesale Trade have fared much worse.

Overall, with the fall in optimism recorded by the Mid-Market only lasting four months, the sector is likely to have experienced the shortest and least severe downturn when compared to the Micro, Small and Large business sectors – and clearly remains the most optimistic sector in the Australian business landscape.

Resilient growth engine

If the period of decline is over for the Mid-Market, then the sector has again demonstrated its strength and resilience. The key question now is whether the signs of recovery for the Mid-Market can be sustained, or whether this is only a pause before the sector enters into a second round of decline. Given that the two largest industries (Property & Business and Other Industries) have proven themselves to be either immune from the downturn or showing strong signs of recovery, the sector as a whole should feel optimistic about the future.

Interested in learning more?

GE Capital Australia works with around 7,500 Mid-Market businesses across the country and we are committed to partnering and supporting them in building their businesses. To find out more about the Mid-Market in Australia, download the full report or follow @GEmidmarketoz on twitter.