In 2013, more than half of middle market companies reported improved
company performance. Overall there was a slight decline in the number of
mid-market companies reporting improved performance, 56% down from 62%
in the last two quarters of 2012. In the fourth quarter revenue grew at
5.0%, marking the slowest rate of increase over the past four quarters,
and down from 7.0% when companies were rebounding from the recession.
However, middle market results are outperforming the broader market by a
wide margin, underscoring the middle market's stability and role as
driver of the U.S. economy.
Middle market companies expect improved revenue growth in 2014, with
57% projecting revenue growth, level to the 60% expected last quarter.
These companies expect increases of 4.3%, down from 5.3% last year and
roughly the same as the third-quarter forecast.
Employment growth stabilizes
In the fourth quarter, 39% of middle market companies said they added
workers, consistent with results over the previous four quarters.
Companies reported mean job growth of 2.5%, down from 2.7% last year,
but up from 2.2% during the first quarter. Looking ahead, the middle
market expects 2.2% job growth in 2014.
Confidence landscape has shifted
The confidence outlook has changed noticeably in the past year with
increased optimism in the global economy and a leveling-off of
confidence in both the local and U.S. economies. only 16% of respondents
reported no confidence in the global economy in the fourth quarter,
less than half of the 34% last year.
Capital investment and hiring restrained by policy uncertainty
A majority of middle market companies said that uncertainty around
government policies is impeding their ability to grow and their
willingness to hire and spend. In the quarter, 58% of all middle market
companies say that federal policy uncertainty has impacted their
business planning, with 63% saying they are less likely to hire new
workers and more likely to trim expenses, and 56% saying they are less
likely to make capital investments.