U.S. middle market firms continue to report improved company performance along with increases in revenue and employment. However the outlook for the future—both in the short term and over the course of the next year— continues to soften across the middle market.
For Q3 2015, the 7.2% rate of growth has rebounded from its dip last quarter. Despite sustained healthy growth, expectations for future revenue increases continue to drop since plunging earlier this year. For the first time, fewer than 50% of firms say they anticipate revenue growth in the next 12 months.
Employment growth remains stable
Slightly more than 40% of companies have expanded their headcounts over the past 12 months. The number of firms expecting to increase the size of their workforce in the coming year has also remained stable throughout 2015. Today, 36% of middle market companies say they have plans to hire in the next 12 months
Global confidence falls while confidence remains solid closer to home
After trending relatively flat since the end of 2013, global confidence dropped significantly for the third quarter of 2015. Today, fewer than half—or 49%—of middle market leaders say they are somewhat to very confident in the global economy. Closer to home, confidence in the national (72%) and local (81%) economies remains strong.
More firms will hold on to cash
The proportion of middle market firms willing to invest extra money fell slightly this quarter from 67% in Q2 2015 to 63% today. Fewer middle market firms have future expansion plans as compared to the end of 2014. However, two in five companies (39%) do intend to introduce a new product or service in the next 12 months.
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