Investments in productivity-boosting measures have resulted in an uptick in the U.S. Middle Market Business Index. The RSM US Middle Market Business Index (MMBI) recorded a 4.7% surge in productivity during the third quarter.
According to a press release by the U.S. Chamber of Commerce, the overall economy of the U.S. is projected to grow at a long-term trend of 1.8% next year. This anticipated growth is attributed to the increase in productivity and a 4.9% pace of growth, both key factors in elevating the long-term projection of the economy. The MMBI itself rose from 129.6 in the previous quarter to 132.9 in the fourth quarter. As strong revenues and net earnings are expected in upcoming months, 42% of middle market executives believe that improvements in general economic conditions have been achieved. Learning from the pandemic era, middle market firms have shown increased willingness to invest in their businesses to enhance productivity amidst a tight labor market. In fact, 26% of surveyed executives stated that they ramped up their borrowing to finance commercial and industrial loans, with 49% planning to do so within the next six months.
“Looking ahead to 2024, it is encouraging to see that businesses in the middle market have improved their outlook on the economy,” said Neil Bradley, Executive Vice President and Chief Policy Officer at the U.S. Chamber of Commerce, as quoted in a press release. “As businesses continue to invest in their growth, they need policymakers in D.C. to get serious about investing in them. That means tackling the rapidly rising regulatory burden and workforce challenges constraining further economic growth from the middle market sector.”
The RSM US Middle Market Business Index was developed collaboratively with Moody’s Analytics by asking executives 20 questions regarding changes across various indicators. These questions encompass improvements within their business, hiring practices, and capital expenditures faced by the firm for the term. If a reading of over 100 is found for the index, it typically signifies that the middle market is expanding. Conversely, a reading below 100 indicates that the market is likely contracting.
