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At $3.8 trillion, the U.S. middle market is the world’s fourth largest economy, behind Japan but bigger than Germany. There are approximately 195,000 middle market companies in America, with revenues ranging between $10 million and $1 billion. Together, they employ some 41 million people and represent one third of U.S. private sector GDP. The segment’s strength is crucial to job growth and the national economy.
The National Center for the Middle Market, a partnership between GE Capital, the largest lender to middle market companies, and The Ohio State University Fisher College of Business, just released the first Middle Market Indicator (MMI). It will take a quarterly pulse of the segment’s health and outlook.
So how are things? Quite alright, the data shows. The middle market motored through the financial crisis. While big companies lost 3.7 million jobs during the downturn, the middle market added 2.2 million workers.
The MMI also found an 6.9 percent growth in reported revenues in the segment over the last year and projects a 5.2 percent revenue growth through the next 12 months. Compare that to large S&P businesses, which expect to grow just 4.7 percent.
But not all is rosy. While 28 percent of middle market companies have confidence in their local economy, positive outlook drops to 15 percent for the U.S. economy as a whole, and shrinks further to 7 percent for the global market. The businesses also cited healthcare costs, soft margins, and government regulations as their biggest worries. As a result, they plan to save some 41 percent of any extra cash.
We’ve analyzed the results and put them into a graphic. Take a look.