Middle Market Growth Keeps Exceeding Expectations
The U.S. middle market has a long history of cautious optimism, or what some might call under promising and overdelivering. Regardless of current performance, middle market leaders almost always predict a moderated rate of revenue and employment growth going forward. With the exception of 2020, companies have always outperformed their forecasts, usually by a significant percentage. This trend continues post-pandemic but at notably higher levels of overall performance as the middle market keeps setting new record levels of growth and performance in nearly every reporting period. Since Q4 2021, companies have sustained average year-over-year revenue growth of 12.3% and average year-over-year employment growth of 10.5%, both well above pre-pandemic rates of growth. With other key performance indicators rising, including economic confidence and an increased willingness to reinvest in different areas of the business, we can fairly expect companies to meet or exceed their projections of 8.8% revenue growth and 9.5% employment growth for the 12 months ahead. However, middle market companies will need to continue to battle many of the same headwinds that have hindered performance historically, including talent and operational issues, while simultaneously dealing with the inflation and economic uncertainties of the current environment. Integrating new technologies such as AI and dealing with the impacts of climate change are escalating issues that have middle market leaders considering how to mitigate new risks and keep their growth trajectories on track.
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