National Center for the Middle Market (NCMM)

January 22, 2020

COLUMBUS, OH — The National Center for the Middle Market (NCMM) released its 4Q Middle Market Indicator (MMI) today with data showing that the performance of middle market companies rebounded from a relatively weak third quarter. Middle market executives’ economic confidence, investment plans and short- and long-term projections have also risen, though not back to the levels of 2018 and the first half of 2019.

Following Q3’s report of a 5.8 percent annual revenue growth rate, Q4 saw an increase to 7.5 percent. This increase is driven by a larger number of companies growing at a rate of 10 percent or more. Similar to the previous quarter, executives still expect revenue growth below five percent in the next 12 months. Nearly half of middle market companies report plans to introduce a new product or service in 2020, and a similar proportion expect to expand into new domestic markets. These data align with reports of increased confidence in the global, national and local economies.

“Although actual growth numbers are lower than reported one year ago, plans for expansion and investment have recovered.” said Thomas A. Stewart, executive director of the NCMM. “The middle market may well be poised to begin 2020 on a strong note — but with clear undertones of anxiety.”

Talent continues to be the top challenge faced by middle market companies, as they try to better-train workers to support growth in a low-unemployment economy. They also appear to be building cash reserves as protection in case the economy slows; asked what they would do with an extra dollar, 17 percent say they would put it aside as cash.

“While stronger numbers are reported for Q4, these results should not be interpreted as full-speed ahead,” said Doug Farren, managing director of the NCMM. “However, we cautiously believe the middle market is poised for positive growth in 2020.”

Two-thirds of middle market companies report improved company performance, while 8 percent report deteriorated performance in the previous 12 months. Middle market investment plans show an increased emphasis on information technology. This continuing trend has been seen in previous quarters and will be the focus of NCMM’s major research in 2020.

About the National Center for the Middle Market (NCMM)
The National Center for the Middle Market is a collaboration between The Ohio State University Fisher College of Business and Chubb. It exists for a single purpose: to ensure that the vitality and robustness of Middle Market companies are fully realized as fundamental to our nation’s economic outlook and prosperity. The Center is the leading source of knowledge, leadership, and innovative research on the middle market economy, providing critical data analysis, insights, and perspectives for companies, policymakers and other key stakeholders to help accelerate growth, increase competitiveness and create jobs in this sector.

Housed at The Ohio State University Fisher College of Business, the National Center for the Middle Market is the first center of its kind in the nation. The Center enthusiastically serves middle market firms, students, academic researchers, policy makers, the media and other key stakeholders with interests in the health and well-being of the middle market. The Center is fully committed to funding and distributing the most credible open-sourced research, dynamically creating new knowledge, providing programs that drive value for middle market companies, and offering a well-informed outlook on the health and future of the middle market via the Middle Market Indicator.