Concurrently, middle market employment growth has been consistently above three percent for all of 2014, adding workers at levels even above strong hiring in 2013. Although the nation’s nearly 200,000 mid-sized firms represent only three percent of American businesses, they are projected to create 61 percent of all new jobs in the coming year. Notably, the healthcare industry has seen the largest jump in employment among middle-market firms.

“America’s mid-sized companies have completed a remarkable run in which revenue growth has accelerated for four quarters in a row,” said Thomas A. Stewart, Executive Director, NCMM, a collaboration between GE Capital and The Ohio State University Fisher College of Business. “For the past year, employment growth in the middle market has averaged about three and a half percent—a full percentage point higher than the average in the eight previous quarters. The middle market has found a higher gear.”

Forty-three percent of executives report that employment increased in the past year and mean total employment growth was 3.5 percent, which is well ahead of both its smaller and larger counterparts at 2.2 percent and 2.6 percent, respectively, according to ADP job data. Looking ahead, 64 percent of executives report gross revenue will grow over the next 12 months at an expected mean total revenue growth rate of 5.5 percent. Likewise, 47 percent of executives report employment will rise during the same time frame, growing at 3.6 percent.

The investment outlook slightly declined this quarter, with 61 percent of middle market companies planning to invest dollars back into their businesses. Although executives plan to hold on to more cash, 44 percent of companies say they are extremely or very likely to introduce a new product or service within the next 12 months. Similarly, 41 percent of companies report they are extremely or very likely to expand into new domestic markets over the same time frame.

Challenging labor dynamics

Middle market companies continue to be subject to dynamics in the labor force, with about 50,000 saying they expect the retirement of Baby Boomers to negatively affect their financial performance. Although 68 percent said it will influence their company in some way, nearly 40 percent of middle market firms do not have plans in place to address the impact of Baby Boomer retirements. When it comes to hiring, 63 percent of firms say it has become more difficult to attract people to senior positions, but say it is less challenging to attract talent for entry-level positions.

Mixed economic confidence

Middle market companies have an increasingly negative view of the global economy. About a quarter of all middle market firms—26 percent—report being unconfident in the global economy, up from just 17 percent in Q2 and 15 percent in Q1. Middle market executives' views of the national economy continue to vary based on their company’s home state. Nationally, 67 percent of middle market executives nationwide are confident in the U.S. economy. In Texas, 73 percent of middle-market executives are confident in the U.S. economy. Additionally, 94 percent of Texas executives express confidence in their local economy. In Illinois, 46 percent of middle-market executives are confident in the U.S. economy, likely due to the state’s unemployment rate being 0.8 percentage points higher than the national average.

About the Middle Market Indicator

The MMI surveys 1,000 executives (CEOs, CFOs, and other C-Suite executives) from the middle market's nearly 200,000 companies, focusing on their business capabilities and performance, growth drivers, and economic outlook. This quarter’s MMI was fielded Sept. 11 to 19, 2014. It is weighted to accurately reflect the size and geographic distribution of this sector, which includes companies with revenues between $10 million and $1 billion.

The quarterly MMI tracks responses on the following topics: Gross revenues performance; Overall company performance; Employment performance; Expected 12-month gross revenue and employment growth; Confidence in the global, U.S. and local economies; Key business challenges; Top areas for investment dollars; Perceptions on topical issues and challenges relevant to the U.S. middle market.

The survey is conducted by the independent research firm RTi on behalf of the NCMM.

About the National Center for the Middle Market

The National Center for the Middle Market (NCMM) was founded in 2011 in partnership with GE Capital and is located at The Ohio State University Fisher College of Business. The Center is the nation’s leading research institution dedicated to helping middle market companies be more competitive through impactful research, thoughtful advocacy, and educational programs. To learn more about the Center or the MMI, visit


Jared Favole
Hamilton Place Strategies for the National Center for the Middle Market
(202) 822-1205

Nick Chordas
The Ohio State University Fisher College of Business
(614) 247-4556