Other Key Findings:
The middle market continues to lose confidence in the global and U.S. economies
Only 5% of survey respondents expressed confidence in the global economy, compared with 44% saying they were not confident at all. Those numbers are slightly better for the U.S. economy, with 12% responding that they were confident compared with 24% not at all. The waning confidence in the global and U.S. economies from the first quarter to second spans every major industry segment measured.
Future investment to remain limited; businesses continue to hold cash in the face of uncertainty
In the second quarter, 50% of middle market companies said they planned to hold any extra dollars instead of investing them, up from 41% in the first quarter.
Revenue growth seen but slowing
Year-over-year (YOY) revenue performance from 1Q to 2Q has slowed from 6.9% to 6.1% and projected revenue growth for the next 12 months is down from 5.2% to 4.8% quarter over quarter. Middle market companies expecting revenues to increase 10% or more in the next 12 months dropped to 23%, compared with 28% who expected double-digit growth in the previous quarter’s survey.
*Revisions to the 1Q mean revenue and employment scores have been adjusted using the Winsorization Method to adjust outlier values in the distributions. The extreme values have been replaced by trimmed minimum and maximum (values representing the middle 95th percentile of each overall distribution within the survey instrument). In addition, the means have also been rebased so that they are reflective of the Middle Market as a whole and not solely the proportion of the market experience growth or contraction.
Challenges to middle market business performance persist
A large majority of middle market companies cited uncertainty about health care costs and new government actions as either very or somewhat challenging in the second quarter. These challenges persist from last quarter as the most vexing issues—not surprising since there was little clarity from the U.S. government around changes to health care and other laws at the time of the survey.