Middle Market Indicator Q1 2012
New research from the National Center for the Middle Market (NCMM) reveals that middle market companies grew at a rate of 6.9% in the past year, but expect future revenue growth to slow.
The first-ever Middle Market Indicator (MMI) surveyed 1,000 CEOs, CFOs and other C-level executives representative of the U.S. middle market about the health and outlook of their businesses. The middle market, comprised of about 195,000 U.S. businesses with revenue between $10 million and $1 billion, accounts for a third of the nation’s GDP and private sector employment.
Despite reporting strong results in 2011, middle market businesses expect revenue growth will slow to 5.2% over the next twelve months. These growth expectations still outpace those of large S&P businesses, which expect gains of just 4.7% over the same period.
Middle market continues to add jobs
According to indicator results, middle market companies are adding more jobs to the U.S. economy small peers, and nearly as many as large companies (1.5% net job growth among middle market companies, versus 1.7% net job growth for S&P 500 companies and 1.9% for small businesses).
Middle market firms look closer to home
The MMI found that respondents’ mixed confidence in the global economy is causing mid-market companies to hold more cash and to look for growth opportunities closer to home. Only 15% of middle market businesses are confident in the U.S. economy’s prospects, and only 7% are confident in the global economy. Closer to home, however, confidence is much stronger, with 28% of respondents expressing confidence in their local economy. When asked how they would allocate an extra $1, 41% of respondents said they would save it due to the current economic climate, uncertainty about the future, and the importance of having liquid assets.
The MMI is a quarterly indicator that will be published on the third Wednesday of the month following the quarter. With no analysis previously available, the NCMM launched the MMI to provide insights and analysis on this critical component of the US economy. For more data from the first-ever Middle Market Indicator, including industry-specific findings, please visit the National Center for the Middle Market.