The RSM US Middle Market Business Index (MMBI), presented by RSM US LLP (“RSM”) in partnership with the U.S. Chamber of Commerce, rose in the first quarter, revealing a positive economic outlook among middle market business leaders that was driven by strong improvement in gross revenues and net earnings. Executives expressed confidence in the continued improvement of the U.S. economy, but coronavirus, a health issue of global and economic significance, is expected to have a substantial impact on future sentiment.
In the first quarter of 2020, the MMBI increased significantly, posting a composite score of 132.0, compared to the 127.3 from last quarter. At the time of the survey, 40% of business leaders indicated that the economy improved. Increases in both gross revenues and net earnings boosted the MMBI, with 61% of executives reporting improved revenues during the quarter. Similarly, 52% said net earnings increased over the past 90 days.
“It’s important to note that we fielded this quarter’s survey before the recent economic impact of coronavirus began taking hold,” said Joe Brusuelas, RSM US LLP chief economist. “As concerns over the pandemic proliferate in the global economy, middle market businesses are going to experience a supply shock in the first six months of the year. However, the numbers in the MMBI point to the underlying strength of middle market business conditions, which could be enough to help businesses weather the storm and absorb supply shocks caused by the virus.”
To increase RSM’s ability to track the impact of COVID-19 on the real economy, RSM will be measuring and reporting the MMBI on a monthly basis for the next several months.