RSM US LLP (RSM) – the nation’s leading provider of audit, tax and consulting services focused on the middle market – today announced results of the March reading for its RSM US Middle Market Business Index (MMBI). The MMBI is typically a quarterly index, but the firm will release monthly installments of the MMBI for the duration of the COVID-19 pandemic. As middle market businesses continue to feel the coronavirus fallout within their organizations, the monthly MMBI data aims to keep a stronger pulse on sentiment among middle market business leaders in a time of increased uncertainty and rapid change.
The March data, released today, revealed that the MMBI composite score fell 21.5 points to 110.3, down from the 131.8 in the first quarter of 2020, on a seasonally adjusted basis. The severe drop in confidence was driven by concerns from middle market business leaders around the pandemic’s long-term impacts on the economy, revenue and earnings. Additionally, the MMBI reached a new low in March, dipping beneath the prior low recorded in the fourth quarter of 2015, when middle market companies grappled with uncertainty over price inflation following sharp declines in oil prices and other commodities.
Of the middle market executives polled during the month, 61% said the economy has worsened, and 51% expect a continued downturn over the next six months. Thirty-eight percent of respondents saw gross revenues decline, while 45% expect them to drop in the next six months. A little more than a third (36%) said net earnings decreased in March, and 43% see them falling in the next six months. Employment also saw a significant impact, with 30% of those polled indicating that hiring had decreased in March, and 31% saying they expect it to decrease over the next six months.
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