Columbus, Ohio (October 28, 2015) – U.S. middle market companies continue to report strong revenue growth and confidence in the domestic economy, even as their level of comfort in the global economy and attitude toward investing in their business diminishes amid slowdowns in international markets. These findings headline the National Center for the Middle Market's (NCMM) Q3 2015 Middle Market Indicator (MMI), the latest in a quarterly series of reports designed to uncover the top trends amongst middle market businesses.

The average company in the middle market reported year-over-year growth of 7.2 percent in Q3 2015 – up from 6.6 percent in stated year-over-year growth in the second quarter. Despite this recent growth, just under half (48 percent) of middle market companies expect increases in revenues over the next 12 months (down from 60 percent as reported in the Q2 2015 MMI). At the same time, positive business fundamentals and a healthy M&A environment point to an optimistic outlook for the U.S middle market.

“The middle market continues to lead the U.S. economy with very strong domestic confidence and revenue gains,” said Thomas A. Stewart, Executive Director, NCMM, a partnership between GE Capital and The Ohio State University Fisher College of Business. “Weakness in China and the volatility of this summer’s market seems to have had an effect on middle market companies' outlook for the future, but this didn't hold them back from delivering extremely strong growth in their businesses and industries.”

Middle-market companies – defined as companies with annual revenues between $10 million and $1 billion – account for roughly one-third of the total employment status of the U.S. and generate $10 trillion in annual revenue. Despite its relatively low profile compared to the small and big business sectors, the U.S. middle market is the fifth largest economy in the world following Japan and leading Germany in size.

NCMM’s Middle Market Indicator surveys 1,000 middle market C-suite executives from a variety of business sectors on a quarterly basis to obtain their thoughts on business performance, economic headwinds and trends affecting their industry.

Confidence in Local, U.S. Economies Grows; Diminishes for Global Economy 
Eighty percent of those surveyed in the Q3 2015 MMI said that they felt confident in their local economies, with 72 percent expressing confidence in the broader U.S. economy. In contrast, just half (49 percent) of those surveyed reported that they felt at least somewhat confident in the global economy, down from 58 percent in 2Q 2015.

“Most middle market companies operate only inside the U.S., so it’s good to see that their confidence in the economy locally and nationally is steady and strong,” Stewart added. “And even amid tempered future expectations for growth, revenues of U.S. middle market companies are currently stronger than the GDP growth of China – 7.2 percent versus 6.9 percent.”

Attitude toward Investment Cools from Q2, Remains up Year-Over-Year
The MMI found that middle market companies are slightly more inclined to invest in their businesses compared to last year. When survey respondents were asked what they would do with an extra dollar of investment, 63 percent stated they would invest that dollar in their business (with 37 percent stated they would hold the cash in reserves instead). The number of firms inclined to invest is down from 67 percent in Q2, but up from 61 percent when the question was asked in Q3 2014.

Appetite for M&A Grows
Buoyed by continued positive growth and low interest rates, middle market firms’ outlook for M&A activity has improved. Notably, 19 percent of all middle market companies reported they are looking to make an acquisition in the next twelve months, up from 16 percent in Q1 and Q2 2015. Also, the percentage of companies that are considering being acquired or merging with another company increased to 12 percent from 8 percent in Q2 2015.

Retail, Financial Services and Services Industries Report Strong Growth
Middle market revenue growth over the past year in the retail industry experienced a sharp turnaround after a slump in Q2 2015. Retailers reported an impressive increase to 9.8 percent year-over-year growth, up from just 6 percent year-over-year growth as reported in Q2 2015. Retail companies also anticipate a strong hiring outlook. The average retailer expects to have 6.2 percent of its workforce made up of new hires in the next year. This is up from just 1.2 percent in Q2 2015 and up from 2.4 percent from twelve months ago.

Elsewhere, the financial services sector reported revenue growth of 8.8 percent, up from 7.3 percent in Q3 2014. The services sector reported the highest revenue growth in the middle market with 10.1 percent (up from 7.7 in Q2 2015).

Benefits of Energy Efficiency
Sixty-two percent of middle market firms recognize the importance of sustainability and energy efficiency, with 19 percent of companies ranking energy efficiency as one of their top five business concerns. “It's evident that middle market companies are able to realize cost savings through sustainability initiatives. We expect them placing greater priority on energy efficiency in the future,” Stewart said. 

For additional survey data and infographics including in-depth looks at regional variations, hiring/talent acquisition efforts and other business concerns among middle market companies, visit 

About the Middle Market Indicator (MMI)
The MMI surveys 1,000 executives (CEOs, CFOs and other members of the C-Suite) from the middle market each quarter to examine topics related to business capabilities and performance, growth drivers and economic outlook among other topics. This quarter’s MMI was fielded September 9 to September 18, 2015. It is weighted to accurately reflect the size and geographic distribution of this sector, which includes companies ranging from $10 million to $1 billion in annual revenue. The survey is conducted by RTI International on behalf of the National Center for the Middle Market.

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

Meredith Mitchell
Prosek Partners 
212.279.3115 x268

#   #   #