While the current expansion has not been rapid, it has been extraordinarily long-lived.

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As of this date—October 2017—the U.S. economy has expanded for one hundred consecutive months. That is the third-longest period of uninterrupted growth in U.S. economic history. The longest, 120 months, came in the 1990s; the expansion of the 1960s lasted 106 months. The current expansion has not been rapid; no one would call it a boom. It has not been evenly distributed across places and populations. But it has been extraordinarily long-lived.

It has also been led by middle market companies. In the last five years, non-farm employment in the United States has increased from 142 to 154 million—roughly eight percent. The middle market has added jobs at a rate of 5.5% a year. That figure includes inorganic growth, so it is not apples-to-apples with overall employment. But quarter after quarter, comparable data show middle market employment rising at least twice as fast as employment in smaller or bigger companies. The same holds for top-line growth, which for the middle market has dipped below 6% only four times in the last 20 quarters.

We have noted before how benign the economic climate has been, with negligible inflation, persistently low costs for capital, talent, and energy, and robust equity markets. (This this is the second-longest bull market in history.) Microeconomic signals are green, too. Executives expect profits to rise faster than costs. Forty-one percent of companies say their new-order pipeline has grown, a number that is 10 full percentage points higher than it was at this time in 2016. Among those with fuller pipelines, the average increase is a very robust 13.2%.

Given all this, it is no wonder that middle market executives expressed this quarter their highest-ever level of confidence in their local economies, second-highest ever confidence in the global economy, and third-highest-ever confidence in the U.S. economy. They also say that they will back that confidence with actions designed to secure and extend their growth.

These are plans, not promises; but historically middle market companies have kept close to plan. For example, a year ago 37% planned new domestic expansion, and 36% actually did it.

This worm will turn; worms always do. While the middle market does not seem to face macroeconomic headwinds, there are considerable uncertainties. Company valuations, sovereign debt, and political risk all are high. Trade agreements are being challenged. These or other factors could put an end to the good times, and they will be obvious only in retrospect, and out of executives’ hands. Two major challenges are more under executives’ control.

The first challenge: Talent shortages. Four out of 10 executives say a lack of talent constrains their growth. Executives cannot do much about workforce participation rates, which are affected by factors like an aging population, immigration, and labor lost to opioid addiction. But only 35% of middle market job vacancies are filled by promotion from within, which suggests companies experiencing labor shortages should rely less on the tight outside labor market and invest more in training, developing career paths for employees, and enhancing the employee value proposition to increase retention.

The second challenge: The middle market, like the rest of the economy, is not getting much in the way of labor-productivity improvement. For the last two quarters, revenue growth and employment growth have converged. In 2014, we noted that job growth was trailing revenue grow substantially—in the third quarter of 2014, the two numbers were 7.5 and 3.5, respectively. At that time we wondered if executives were being too cautious about hiring. Now it appears that they are getting fewer gains in productivity than they should—perhaps an indication that they are holding back on capital spending.

The paradox: If they could solve the productivity problem, they would also reduce the talent-shortage problem.