RSM US Middle Market Business Index declines
Confidence wanes amid policy uncertainty
INSIGHT ARTICLE |
The RSM US Middle Market Business Index (MMBI) declined to 125.7 in the third quarter from the record-high reading of 132.1 in the second quarter. This erased much of the bump in middle market optimism that followed the 2016 presidential election and implies improvement in the index during the past year is likely the result of both stronger economic fundamentals and the recovery in corporate earnings that predated the 2016 election. We think that a return to levels closer to the fourth quarter of 2016 (120.1) in the near-term isn’t out of the question amid modest growth expectations and a tight labor market that is increasingly creating challenges for middle market businesses.
RSM US LLP and 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.