4Q22 MMI

MIDDLE MARKET INDICATOR AT A GLANCE

EMployment

revenue

REVENUE

expansion

economic confidence

CAPITAL INVESTMENT

SUMMARY VIDEO

SUMMARY video

SUMMAry video

Revenue growth remains strong and stable.

For the third straight reporting period, the rate of year-over-year revenue growth for the U.S. middle market remains at just over 12%, well above the pre-pandemic average. Four out of five companies increased revenues in 2022. A majority of businesses expect continued strong revenue growth in 2023.

Employment growth reaches a new high.

Middle market companies continue to aggressively add jobs, pushing the rate of year-over-year employment growth to an all-time high of 11.1%. With the exception of wholesale trade, a majority of the businesses in all industry segments experienced employment growth in 2022 and expect to continue adding positions in 2023.

11.1%

57%

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 57% at year-end 2021

79%

10.0%

12.2%

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 78% at year-end 2021

Confidence levels recover.

Middle market leaders report stronger levels of global, national, and local economic confidence at the close of 2022 compared to mid-year. After declining for two consecutive reporting periods, economic confidence appears to be rebounding and is on par with levels reported at the close of 2021.

The proportion of middle market companies willing to invest an extra dollar immediately has declined for the second straight reporting period. However, most savers indicate they are postponing investments for a later date rather than building up cash reserves.

More companies will hold cash in the near term.

Expansionary activity has fluctuated moderately over the past several reporting periods even as companies have aggressively grown revenues and employment. Innovation remains the primary route to growth with approximately half of middle market businesses bringing a new offering to market in 2022.

Companies appear to be expanding with caution.

Will Invest

Compared to 60% at year-end 2021

55%

51%

23%

39%

86%

Local Economy

Year-End 2021 | 87%

74%

National Economy

Year-End 2021 | 81%

73%

Global Economy

Year-End 2021 | 75%

Performance Improves, But Caution Bell Still Tolls

of middle market companies added a new plant or facility

Compared to 26% at year-end 2021

of middle market companies introduced a new product or service

Compared to 55% at year-end 2021

of middle market companies expanded into new domestic markets

Compared to 39% at year-end 2021

16%

32%

38%