Mid-sized firms are on track to add more than 1.25 million jobs in 2013, which would account for 7 out of every 10 new jobs created this year. In addition, the nearly 200,000 companies representing the U.S. middle market grew revenue at 5.5% over the past 12 months, more than double the rate of S&P 500 companies.
The U.S. middle market, made up of businesses with revenue between $10 million and $1 billion, contributes one-third of non-government U.S. GDP and accounts for 44.5 million jobs, or one-third of total U.S. employment. Between 2007 and 2010, U.S. middle market firms created 2.2 million jobs while large corporations cut more than 3 million jobs. The mid-market continued to outperform in job creation, with more than 2 million new jobs created between 2010 and 2012.
Uncertainty Plaguing Mid-Market Growth – Job Growth Projections Cut by 180,000
While annual growth trends are positive, this quarter’s index revealed a distinct moderation in quarterly gains as well as in employment, revenue, investment and confidence growth projections in the year ahead. The employment outlook over the next 12 months fell by almost 200,000 between Q2 and Q3, with middle market companies expecting to add around 900,000 new jobs. This comes as 47% of companies said that government uncertainty was highly challenging to them, a strong increase over Q2.
The Impact of Continued Uncertainty
Washington’s latest agreement to reopen the government and extend the debt ceiling sets the stage for another potential crisis of confidence early next year. 45% of the executives surveyed indicated a government default would have direct impacts on their businesses with higher interest rates, reduced business and consumer confidence, and reduced confidence in the credit worthiness of the U.S. Some 94% of the middle market executives consider the higher interest rates as the most adverse impact of the U.S. default on debt.
From: Ohio State University Fisher College of Business
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