The Q2/2015 Middle Market Indicator published by the National Center for the Middle Market (NCMM), a partnership between GE Capital and The Ohio State University Fisher College of Business, indicates that 66% of middle-market executives reported improved past-year company performance in the second quarter of 2015, up two percentage points from the first quarter.
Additionally, NCMM said companies in the center of the middle market, with revenues between $50 million to $100 million by 10 percentage points, experienced particularly solid performance during Q1/152015.
Highlights of the NCMM report include:
Gains: Small Yet Steady
Since Q2/2014, the middle market saw a three percentage point increase in companies reporting improved performance – 66% in Q2/2015 vs. 63 % in Q2/2014 – while the percentage of companies that reported deteriorated performances fell from 9% to 6%, representing a shift towards sustainable, solid growth. Three out of five middle market businesses continue to anticipate future business growth.
Rightsized Workforces
Employment growth in the middle market continues to slow, with the mean total growth decreasing from 4.3% in Q1/2015 to 3.9% in Q2/2015. Furthermore, companies lowered expectations for hiring over the next 12 months, with 38% expecting to hire in the next year and only 31% expecting to hire in the next three months, both down from the previous quarter. Meanwhile, companies at the high end of the middle market, with revenues of $100 million to $1 billion, are showing significantly reduced workforce growth expectations with 35% anticipating a new hire, down from 42% in Q1/2015.
Top Concerns
Two-thirds of middle market companies expressed concerns that unexpectedly rapid wage increases would negatively impact their businesses. The construction (77%) and healthcare (76%) industries are the most worried about wages, while companies in the financial services space (53%) were fairly neutral on the issue.
In addition, 76% of middle market companies feel that state and federal regulations negatively affect their business, noting the complexity of regulations and costs of compliance as the main issues.
Other Findings:
Access the full NCMM survey data here.
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One Reply to “NCMM: Middle-Market Economy is Stable”
Its interesting to see the negative impact state and federal regulations have on business.