August 5, 2021 Middle Market Indicator Shows Uneven Pandemic Recovery

Widespread uncertainty among middle market companies continues to fade while optimism returns.

COLUMBUS, OHIO — As the halfway point of 2021 approaches, there are glimmers of hope regarding the pandemic’s impact on middle market businesses. While some companies have made impressive recoveries from the depths of a year ago, others continue to struggle to rebound to previous levels of performance.

Data from the 2Q 2021 Middle Market Indicator, released today by the National Center for the Middle Market (NCMM), reveals that the year-over-year growth increased to 8.0%, a drastic change from the decline of -1.2% reported in Q4 2020. At the same time, the S&P 500 reports 15.1% revenue growth, indicating a general return to positive topline results.

The optimistic forecast from middle market executives is reflected in projected revenue growth — 9.8% for the next 12 months. It is a substantial increase from the 4.2% revenue growth projected in December 2020 and on par with historical levels of growth. Employment increases are also evident, with the average growth rate of 5.9% for the past 12 months. Over the next year, hiring is expected to accelerate even more as companies stabilize and use more of their full capacity; employment growth is projected at a robust 8.9%

The positive numbers, however, tell only part of the story — 25% of those surveyed said business was lagging compared with prior to the pandemic, and 8% reported they were struggling to get by.

“It’s very promising to see middle market performance return to levels we’ve become accustomed to seeing over the past 10 years” said NCMM Managing Director Doug Farren. “It’s important to note, though, that the return to normal is not uniform, as approximately one-third of mid-sized businesses reported continued struggles with pandemic-related issues.”

With growing confidence and reduced uncertainty, companies are making plans to invest in their businesses. In 2Q 2020, only 52% reported they would immediately put an extra dollar to work via investments; this quarter, 59% said the same. Additionally, 25% of companies say the changes they made to explore introducing new products and services, which were driven by the pandemic, will become permanent.

Additional survey data and infographics, including in-depth looks at regional variations, hiring/talent acquisition efforts and other business concerns among middle market companies, can be found at http://www.middlemarketcenter.org.

About the Middle Market Indicator (MMI)
The MMI, which was created in 2012, surveys 1,000 executives (CEOs, CFOs and other financial decision makers) from the middle market to examine topics related to business capabilities, performance, growth drivers and economic outlook among other topics. This quarter’s MMI was fielded during the first two weeks of June 2020. It is weighted to accurately reflect the size, industry-wide and geographic distribution of this sector, which includes companies ranging from $10 million to $1 billion in annual revenue. The 2Q 2021 survey was conducted by RTi Research on behalf of the National Center for the Middle Market and funded in partnership with sponsor Chubb and supporters Visa and VistaVu.

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.

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