More middle market companies are experiencing growth than at any other time in the history of the Middle Market Indicator. However, the rate of growth is slightly declining.
In Q2 2015, middle market companies reported revenue growth rates of 6.6%, the same as one year ago, but less than the 7% reported for the last three quarters. Six in 10 firms expect to grow revenue over the next year, but at a slower rate of 5.1%, the lowest level measured over the past year.
Slower employment growth persists
While middle market firms continue to hire, and 46% report increases in the size of their workforce, the rate of employment growth is continuing the decline that began last quarter. Companies report mean total employment growth of 39%, down from 4.3% last quarter, but still higher than levels reported one year ago. Looking ahead, expectations for employment growth over the next year continue to be lower at 2.7%.
National and local confidence continue to outpace global confidence
While confidence in the national economy has been increasing steadily over the last year, it declined slightly in 2Q 2015, along with local confidence. However, global confidence, which has been flat over the last year, increased marginally this quarter. Still, attitudes toward the local and national economies are much stronger than confidence in the global economy, but the gap continues to narrow.
Talent and regulation concerns are growing
Employment issues, including hiring and retention remain the top internal challenges for middle market companies. External challenges include competition and the impact of government regulations, which are expected to be the biggest hurdles they will have to overcome in the year ahead.
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