middle market businesses and companies enjoying strong 2018

The last three months, mark yet another quarter of record-high earnings for U.S businesses classified as being in the middle market, according to an index compiled by RSM International, a multinational network of accounting and auditing firms headquartered in London.
Middle market businesses are businesses earning anywhere from $10 million to $1 billion a year.
The index is compiled and published every quarter in conjunction with the U.S. Chamber of Commerce.
The most recent findings, notes Neil Bradley, executive vice-president of the Chamber, show “optimism and continued growth” in middle market companies.
And those companies, Bradley added in a statement, represent “more than one-third of U.S. jobs.”
With index responses above 100 representing optimism, and anything below that number classified as pessimism, the most recent total RSM Middle Market Index score works out to 134.4.
That number is in line with the 134.5 and 136.7 scored respectively in the first two quarters of this year, and is only the latest indication of a trend that has been overwhelmingly on the up side since the spring of 2015.
Such strong index showings, notes Joe Brusuelas, chief economist with RSM, “imply a sustained period of strong economic growth heading into the final three months of 2018 and next year.”
Some 62 percent of middle market executives participating in the index survey say their company’s revenues increased in the third quarter, a 5 percent jump over the previous quarter.

More important, 67 percent said they expect revenues to increase in the next six months.
Despite these good numbers, respondents are worried about the Trump Administration’s tariff policies and trying to figure out the best way to respond.
“Some 30 percent of businesses indicate they increased their inventory levels, while 40 percent state they expect to do so,” writes Brusuelas, adding: “Some middle market businesses could be caught off ground if the trade spats intensify or result in increasing production costs.”
As with the construction industry in general, the most recent RSM Index findings indicate that middle market companies are struggling to “attract qualified talent in this booming economy.”
Brusuelas adds that because of the labor shortage some middle market companies are “testing new strategies to make use of their existing employee base.”
Those companies are additionally increasing their investments in technology, and “taking advantage of automation.”

By Garry Boulard

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