Middle Market Companies Sustain Record-High Year-Over-Year Revenue and Employment Growth
The rates of year-over-year middle market revenue and employment growth, both of which have been climbing sharply since mid 2020, have leveled off but remain at historically high levels. Most firms have continued to grow, and most of the growers are growing fast, increasing revenue and employment at rates of 10% or more annually. However, headwinds in the form of skills shortages, rising labor costs, inflation and global discord may prove to be formidable challenges as companies look to sustain aggressive growth rates for the remainder of the year and into 2023.
Companies are starting to show a greater inclination to hold cash in reserve as opposed to earmarking it for future investment. Furthermore, expansionary plans for the next 12 months are muted compared to six months ago. The strongest signal of a potential slowdown is economic confidence: local, national and global economic confidence levels, which showed signs of faltering last reporting period, have all dropped significantly with national and global confidence currently below their five-year historic averages. Nevertheless, most middle market leaders say their firms will continue to increase revenue and add people at a rapid pace over the next 12 months.
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