Amid Challenges, Confidence Remains Strong
Q2 MMI Graphics Presentation: Amid Challenges, Confidence Remains Strong
Every quarter, the National Center for the Middle Market conducts an online survey to gain insights from more than 1,000 C-level executives and financial decision makers. The respondents represent private and public organizations earning between $10 million and $1 billion in gross annual revenue.
The survey’s objective is to provide short- and long-term outlooks on topics ranging from business growth to confidence in the economy.
Answers for the second-quarter survey were compiled during the first two weeks of June, 2017.
Generally speaking, middle market leaders feel company performance remains strong, with 65 percent seeing an improvement over last year. While not as strong as the first quarter, this optimism is still some of highest since the first quarter of 2012.
Meanwhile, just 5 percent say conditions have deteriorated in the last 12 months.
Average reported revenue growth across all sectors was 6.7 percent, which is a return to average levels after the first quarter’s record-breaking 9.2 percent jump.
And while many industries maintained comparable revenue growth from last quarter, Retail Trade was the only industry to break ahead of last quarter’s growth. The industry saw a jump of 7.1 percent, compared to last quarter’s 6.8.
The Services industry, on the other hand, saw the greatest year-over-year growth at 9.9 percent.
And when it comes to growth, the rollout of new products is a key factor, as 45 percent of middle market firms introduced a new product or service in the past 12 months.
Looking ahead, 44 percent of firms believe they’ll introduce a new product or service in the coming year.
Additionally, 38 percent of firms expanded into new domestic markets.
[Employment Growth and Outlook]
Employment also saw growth, but similar to revenue, numbers didn’t reach the highs of last quarter. Even so, larger firms ($100M to $1B) saw the most growth at 6.6 percent. On the other side, smaller firms ($10M to $50M) had new employment growth of 5.4 percent.
And similar to revenue, the Retail Trade industry saw the biggest burst of growth at 9.1 percent. The Services industry came in second with 7.8 percent.
[Global Economic Outlook]
Confidence in the local economy, similar to last quarter, sits at nearly record-breaking levels. And while confidence in the U.S. and global economies dropped slightly from Q1, they are still historically positive.
Confidence in the U.S. economy is at 84 percent, down 6 percentage points from last quarter, but up 15 points from Q2 of last year. Confidence in the global economy sits at 70 percent from 77 percent last quarter. And yet this is 20 percentage points higher than Q2 of last year.
Finally, confidence in local economies is at 87 percent, down just 1 percentage point from last quarter.
Despite these growth projections and continued confidence, today’s middle-market leaders continue to face challenges from both internal and external forces.
Talent management issues, such as employee retention and talent recruitment are a primary concern, as are core business issues, such as maintaining growth and managing capital.
Maintaining growth and managing capital, as well as other core business issues, are also cited among top external challenges, with competition and government rules and regulations also factoring in.
For more insights, please download the full Middle Market Indicator Report and check out our podcast for expert insights on how the latest survey findings may impact the South Florida region.
This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
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