Since the beginning of the MMI survey report in early 2012, the Center has collected performance metrics such as year-over-year revenue and employment growth. In addition, we ask middle market leaders to project the next 12 months for their business, taking into account current economic conditions, growth plans, customer demand, and any foreseen headwinds. The last two years of uncertainty have created some challenging circumstances for normal operations, let alone strategic planning.
It’s interesting to compare revenue growth projections with actual reported results a year later. Note, we do not survey the same companies each time, but the data is weighted by the U.S. business Census for size, geography, and industry to accurately represent the overall middle market segment of the U.S. economy. For instance, from 2017-2019 the pattern was fairly consistent: projected revenue growth averaged 5.6%, and reported growth averaged 7.8%. The “spread” of 2.2% was fairly consistent across five surveys (i.e. no outliers). What does it mean? Middle market leaders can be counted on to be conservative by nature, and generally under promise and over deliver on growth.
So what has happened during the pandemic? Market uncertainty, workforce challenges, supply chain disruptions, and generally unprecedented conditions have thrown the consistent nature of these projections completely out of line. For the first time in 10 years, the MMI data showed declining revenue for the 2020 mid-year and year-end waves. But then we saw a promising recovery – although split among those doing well and a number of businesses still struggling. The year 2021 ends with the highest reported average revenue growth on record with nearly all middle market companies contributing to the upswing. The plunge of 2020 has now been followed by a surge in 2021, and the projections for next year are promising.