United States

RSM US Middle Market Business Index

MMBI declines amid slowing global growth, heightened uncertainty

INSIGHT ARTICLE  | 

According to the RSM US Middle Market Business Index (MMBI), middle market business sentiment declined in the third quarter of 2019 to 129.4 from 132.3 in the prior period, as overall global economic growth slowed, the manufacturing sector continued to contract and tariffs began to affect business results. While current-quarter sentiment remains solid, forward-looking indicators in the survey’s subindices denote some risk for middle market businesses in the months ahead.

It is important to note that the third-quarter MMBI survey was conducted prior to the most recent escalation of the trade war between the United States and China, the resulting impact on the global supply chain and the ensuing tightening of financial conditions reflected in declining stock prices, an inversion of the yield curve and a widening of credit spreads in the bond market. These developments may cause further deterioration of middle market business sentiment in coming quarters.

The heightened level of concern around the economy’s direction is most noticeable in the relatively low number of middle market executives who indicated they expect to boost capital outlays on fixed business investment—a telltale sign of the heightened “uncertainly tax” resulting from instability in the macroeconomic environment.

Download the third quarter report

MMBI highlights

Middle market business sentiment declined in the third quarter of 2019 to 129.4 from 132.3 in the prior period, as overall global economic growth slowed and the trade war escalated.


 

Gross revenue performance

Fifty-eight percent of executives reported gross revenues increased in the current quarter. Sixty-three percent expect revenues to increase in the next six months.


Net earnings performance

Fifty-three percent of middle market executives reported net earnings increased in the current quarter. Sixty-four percent expect earnings to increase in the next six months.


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Download the full third quarter 2019 report

RSM US LLP and The Harris Poll have collected data on middle market firms from quarterly surveys that began in the first quarter of 2015. The survey is conducted four times a year, in the first month of each quarter: January, April, July and October. The survey panel, the Middle Market Leadership Council, consists of 700 middle market executives, and is designed to accurately reflect conditions in the middle market.

The data for each quarter are weighted to ensure that they correspond to the U.S. Census Bureau data on the basis of industry representation. A reading above 100 for the MMBI indicates that the middle market is generally expanding; below 100 indicates that it is generally contracting. The distance from 100 is indicative of the strength of the expansion or contraction. Read more about how the index is constructed. 

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