Executives running a cohort of companies that employ more than 44 million Americans, a third of the U.S. workforce, are growing optimistic about their business prospects and continued hiring, according to the latest quarterly survey of the sector, called the Middle Market Indicator.
The U.S. middle market includes businesses earning between $10 million and $1 billion in annual revenues. Growing at 6.5 percent over the past 12 months, the group is significantly outpacing the S&P 500’s 0.5 percent rate of expansion. The segment has historically served as a critical indicator for the health of the economy.
The new results, which were published today, found renewed optimism among middle market firms in terms of growth and hiring appetite in the first quarter of 2014. Their leaders now project hiring 1.4 million workers in the next year, a 50 percent increase from estimates given last year.
The executives attribute their positive outlook to less uncertainty in government actions and fewer concerns involving health care costs. Their focus has shifted back to recruiting strong talent, addressing wage pressures and accessing capital to garner investments in their companies.
Still, middle market firms are keeping a close watch on what happens in Washington, and D.C. is paying attention. In April, members of Congress formed the bipartisan Congressional Caucus for Middle Market Growth, under the leadership of Reps. Steve Stivers (R-OH), Jared Polis (D-CO), Tom Rice (R-SC) and Brad Schneider (D-IL). The caucus plans to educate policy makers and leaders on how the middle market serves as a powerful engine for job and economy growth.
Taken by itself, the U.S. middle market would be the fifth largest economy in the world.
Congressman Polis called segment “a powerful economic engine” that “moves America.” He said it “has proven to be a resilient and consistent driver of job creation and sales growth, even during the headwinds of the recession.”
The Middle Market Indicator (MMI) is a quarterly debrief of 1,000 middle-market executives published by the National Center for the Middle Market. The Center was founded as a partnership between The Ohio State University’s Fisher College of Business and GE Capital in 2011.