RSM US Middle Market Business Index remains robust
Index eases slightly in tax plan’s wake
INSIGHT ARTICLE |
The RSM US MMBI eased to a still-robust reading of 134.5 in the second quarter, down slightly from a high of 136.7 three months earlier amid euphoria over the new tax legislation. The lagged impact of pro-cyclical fiscal stimulus in store should continue to stoke economic growth and support current middle market sentiment at these levels.
Rising international trade tensions and modest tightening of domestic and global financial conditions did little to dent overall market sentiment among middle market businesses in the second quarter. Executives say they expect to expand hiring and increase compensation amid strong revenues and net earnings. The MMBI report also examines middle market executives’ cautious outlook for capital expenditures following the 2017 Tax Cuts and Jobs Act (TCJA).
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.