2Q23 MMI

MIDDLE MARKET INDICATOR AT A GLANCE

EMployment

revenue

REVENUE

expansion

economic confidence

CAPITAL INVESTMENT

SUMMARY VIDEO

SUMMARY video

SUMMAry video

Middle market companies continue aggressive growth trends.

The rate of year-over-year revenue growth for middle market companies has remained in the double digits for 24 months. While the growth rate has slipped slightly from the all-time-high of 12.3% recorded at the close of 2021, four out of five companies continue to experience significant yearly topline growth. Middle market leaders expect that growth to persist over the next 12 months.

Middle market job growth remains strong.

Middle market businesses continue to increase the size of their workforces to keep pace with sales growth. While the rate of year-over-year employment growth has slowed for lower and core middle market businesses, the largest companies continue to add new jobs at an accelerated pace. From an industry perspective, financial services and professional services companies are experiencing the most significant employment growth.

10.1%

56%

10.0%

growth over the past 12 months

growth projected over the next 12 months

of middle market companies report employment growth over the past 12 months

Compared to 58% at mid-year 2022

81%

9.6%

11.8%

growth projected over the next 12 months

growth over the past 12 months

of middle market companies report increased revenue over the past 12 months

Compared to 79% at mid-year 2022

Higher confidence levels hold steady.

The levels of local, national, and global economic confidence among middle market business leaders received a boost at the close of 2022 and remain high through the first half of 2023. Despite a growing number of leaders citing the economy as a key challenge for their businesses, most companies are at least somewhat confident in the current economic climate.

After declining over the past 12 months, the proportion of companies willing to immediately put an extra dollar to work in their businesses has returned to 60% with investors most likely to put dollars toward plants and equipment or IT. However, two out five companies continue to say they would save the cash, with most savers holding the money for future investments. Overall, the inclination to invest is still muted compared to the pre-pandemic period.

Investment appetites begin to rebuild.

Significantly more companies report introducing a new product or service over the past 12 months compared to the previous 12-month period. Other types of expansionary activity, including entry into new markets and the opening of new facilities, have increased as well, but at a much slower rate.

A growing proportion of companies are expanding through innovation.

Will Invest

Compared to 59% at mid-year 2022

60%

57%

25%

39%

87%

Local Economy

Mid-Year 2022 |78%

74%

National Economy

Mid-Year 2022 | 69%

74%

Global Economy

Mid-Year 2022 | 64%

Performance Improves, But Caution Bell Still Tolls

of middle market companies added a new plant or facility

Compared to 23% at mid-year 2022

of middle market companies introduced a new product or service

Compared to 49% at mid-year 2022

of middle market companies expanded into new domestic markets

Compared to 36% at mid-year 2022

16%

32%

38%