4Q20 MMI

MIDDLE MARKET INDICATOR AT A GLANCE

EMployment

revenue

REVENUE

expansion

economic confidence

CAPITAL INVESTMENT

SUMMARY VIDEO

SUMMARY video

SUMMAry video

Year-over-year middle market gross revenues declined by -1.2%

On average, middle market companies report generating less gross revenue in 2020 than they did in 2019. However, the rate of revenue decline has slowed since mid 2020. The middle market as a whole predicts a return to positive growth in 2021, but just 44% of companies say they expect to contribute to this growth.

Year-over-year middle mark employment declined by -2.2%

As with revenues, employment is down compared to 12 months ago. But the rate of decline has slowed here as well over the past six months. A third of middle market companies expect to add new jobs in 2021, driving anticipated employment growth of 2.2% for the middle market in the year ahead.

-2.2%

22%

2.2%

decline 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 48% in 4Q‘19

46%

4.1%

-1.2%

growth projected over the next 12 months

decline over the past 12 months

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

Compared to 73% in 4Q’19

Confidence levels remain well below five-year averages

After plummeting sharply in mid 2020, the proportion of middle market executives reporting at least some level of confidence in the global, national, and local economies improved notably over the past six months. Still, current confidence rates continue to lag behind numbers recorded in 2017, 2018, and 2019.

Compared to June 2020, a slightly larger proportion of middle market executives say they would put an extra dollar to work immediately as opposed to hold cash. However, at 57%, this number is well below the 70% of leaders that were inclined to invest at the end of 2019, before the pandemic was declared.

Investment appetites remain relatively weak

In 2020, fewer middle market companies brought new offerings to the market or expanded to reach new customers in new areas. Yet, the proportion of companies taking on new debt continued to inch up.

Expansion activity decreased notably in 2020

Will Invest

Compared to 52% in 2Q'20

57%

38%

23%

71%

Local Economy

2Q‘20 | 64%

67%

National Economy

2Q’20 | 57%

60%

Global Economy

2Q’20 | 49%

Performance Improves, But Caution Bell Still Tolls

of middle market companies took on new debt

Compared to 21% in 2019

of middle market companies introduced a new product or service

Compared to 47% in 2019

of middle market companies expanded into new domestic markets

Compared to 37% in 2019

23%

38%