2023 Year-End Indicator shows middle market firms performing at robust levels

High growth rates continue as macroeconomic challenges persist

COLUMBUS, OHIO —The U.S. middle market continues to thrive in the post-pandemic era with record-setting proportions of companies reporting year-over-year improvements in overall company performance, increases in revenue growth and expansion in the size of the workforce.

The Middle Market Indicator, released today by the National Center for the Middle Market (NCMM), reveals that middle market companies continue to report consistent and strong year-over-year revenue growth at 12.4%. In addition, the percentage of middle market companies reporting high levels of performance improvement also increased from 72% in December 2022 to 77% in the latest survey, which collected data through December 2023.

Along with record revenue growth, economic confidence remains high and on par with mid-year 2023 data. Confidence in the global (72%) and national (73%) economies remained positive, with a slight dip of four percentage points noted on the local level (83%).

While hiring continues to be at historically high levels since 2021, the rate of that growth has continued to slowly decline. Middle market companies reported 9.6% growth compared to 10.1% at mid-year 2023.

An emerging trend middle market businesses noted last year has been the rise of AI integration, with 34% of MMI respondents reporting that they are either using or actively testing AI tools. Companies with 5% or better revenue growth, or those that are fully integrated into digital solutions are the fastest adopters of AI. When asked about the key elements of incorporating AI, respondents reported that cost remains the most important (63%), followed by business need (62%) and data privacy/security (59%). Companies that have not adopted AI find managing risks more challenging and are more likely to save an extra revenue rather than invest it.

“The middle market continues to be a source of consistent growth across various sizes, industries and geographies,” said Doug Farren, managing director of the NCMM. “These companies demonstrate a willingness to invest in expansion through new products and services or entering new markets, and are particularly curious about the benefits as well as risks of AI in their business”

Additional MMI data and infographics, including in-depth looks at regional variations, hiring/talent acquisition efforts and other business concerns among middle market companies, can be found at http://www.middlemarketcenter.org.

About the Middle Market Indicator (MMI)

The MMI, which was created in 2012, surveys 1,000 executives (CEOs, CFOs and other financial decision makers) from the middle market to examine topics related to business capabilities, performance, growth drivers and economic outlook among other topics. The MMI survey is conducted in June and December each year. It is weighted to accurately reflect the size, industry-wide and geographic distribution of this sector, which includes companies ranging from $10 million to $1 billion in annual revenue. The survey is conducted by RTi Research on behalf of the National Center for the Middle Market.

About the National Center for the Middle Market (NCMM)

The National Center for the Middle Market is a collaboration between The Ohio State University Fisher College of Business, Chubb and Visa. It exists for a single purpose: to ensure that the vitality and robustness of middle market companies are fully realized as fundamental to our nation’s economic outlook and prosperity. The center is the leading source of knowledge, leadership and innovative research on the middle market economy, providing critical data analysis and insights for companies, policymakers and other key stakeholders. NCMM is fully committed to funding and distributing the most credible open-sourced research, dynamically creating new knowledge, providing programs that drive value for middle market companies and offering a well-informed outlook on the health and future of the middle market via the Middle Market Indicator.