Rich in resources and still rapidly growing, Australia has managed to avoid some of the worst effects of the global economic crisis. Still, the country’s economy has not been immune to the slowdown, especially in industries like manufacturing, construction and wholesale trade. One often overlooked segment of the economy, however—the middle market of medium-sized companies with revenues between $10 and $250 million—has shown signs of resilience and optimism, according to a study by GE Capital that was one of the centerpieces of a GE Works summit on the Australian market today in Sydney.
The report’s findings show that the Australian middle market was the last to experience a drop in optimism among CFOs—meaning a shift from focusing on growth to being concerned about barriers to growth—compared to micro, small and large businesses, from October 2011 to January of this year. The middle market was also among the first to recover, with CFOs renewing their focus on growth in February.
The relative strength of the Australian middle market and optimism of its executives mirrors middle markets in other places, an emerging trend closely monitored by GE Capital, one of the world’s largest lenders to medium-sized companies. In the U.S., where GE Capital and The Ohio State University Fisher College of Business have partnered on The National Center for the Middle Market, the sector also outperforms small and large businesses. Even in the struggling E.U., where good news is nearly impossible to find, the middle market shows positive, if faint, signs of life. There, in the U.S. and in Australia, the middle market serves as a key remaining engine of sustainable job growth and source of vital economic contributions.
In Australia, where GE Capital works with 7,500 medium-sized businesses (offering not just financing but a full suite of consulting services through GE Access), the middle market represents only 1.4% of businesses but provides one third of all business revenue and employs more than 3.2 million workers.
