Thomas Stewart, the Executive Director of the National Center for the Middle Market, frequently refers to Middle Market businesses as “The growth plate of the U.S. economy.” Since the economic downturn of 2007-08, the Middle Market can also be seen as a life preserver.
According to a new American Express and Dun & Bradstreet report, 92 percent of the jobs created since 2008 have come from Middle Market companies (defined here as between $10 million and $1 billion in annual revenues). In raw numbers, the Middle Market has created 2.1 million of the 2.3 million new U.S. jobs in the past five years.
Since 2008, private sector employment has increased by just 1.3 percent. Job growth at large companies has been sluggish, while small businesses actually have lost jobs in the past six years. But the Middle Market has added jobs at a healthy 4.4 percent clip.
Click here to see video.
The report also found the following characteristics of Middle Market companies. The research is consistent with similar reports conducted by the National Center for the Middle Market:
- The vast majority of Middle Market businesses are privately held companies.
- The typical Middle Market company employs 368 workers, compared to an average of 23,226 employees at large corporations.
- Middle Market companies are found in every sector, including manufacturing, business services, construction, healthcare, education and wholesale/retail.
- Middle Market companies are mature businesses, having been in business an average of 42 years.
- The global market remains largely untapped by Middle Market businesses. Only 17 percent import or export their products or services.
The report’s authors write, “This view of the characteristics and contributions of middle market firms finds them to have played a significant role in the nation’s post-recession economic recovery….Middle market firms are indeed catalyzing U.S. economic growth.”
As for the National Center for the Middle Market, their latest research shows that Middle Market growth is slowing somewhat, but remains strong. The Center’s Middle Market’s Q1 2015 Middle Market Indicator found that mean revenue growth in the Middle Market increased to 7.4 percent in the first quarter of 2015, a percentage point higher than in 2014.
However, 59 percent of Middle Market companies anticipate future growth, compared to nearly 75 percent at the end of 2014. Likewise, Middle Market hiring will continue, but at a slower pace. Approximately 39 percent of Middle Market businesses expect to add workers in the next 12 months, down from 52 percent in the fourth quarter of 2014.