A new research report American Express and Dun & Bradstreet Middle Market Power Index Series Finds That mid-sized firms are responsible for more than half (51.7%) of total U.S. job growth since 2011.
The report shows that Connecticut in 17th nationwide in the number of middle market [$10 million-$1 billion in annual revenues] companies. The Nutmeg state has an estimated 2,505 middle market companies, which make up 0.97% of all firms in the state according to the latest.
Middle market firms are outpacing their smaller and larger counterparts when it comes to growth in number of firms, employment, and revenue.
While middle market companies account for less than 1% of all commercially-active firms, they experienced the greatest growth in overall numbers (83.9%), employment (103.3%) and revenue (99.9%) since 2011, they contribute about one in four dollars (27%) and employ a little more than a quarter of U.S. workers (27%) in the private sector.
Overall, middle market firms were also responsible for more than half (51.7%) of the 51.8 million new jobs that have been created in the U.S. since 2011.
“Although small in number, middle market companies pack a large economic punch,” said Brendan Walsh, Executive Vice President, American Express Global Commercial Payments. “It’s not just the small startups and large multinational companies that are hiring the most people and leading the way in revenue growth, it is also mid-sized manufacturers and wholesalers in the heartland, which are becoming leaner and more globally competitive. Growth in these sectors, among other middle market industries, is what is really moving the needle for the American economy.”
“Middle market firms are responsible for much of the economic growth we have experienced over the past several years,” said Nalanda Matia, lead economist at Dun & Bradstreet. “These companies are clearly growth-oriented and are indicative of where the economy may outperform in the years ahead.”
The middle market economy drivers are more likely found in “Middle America” than the booming southern states.
None of the seven states with the highest concentration of companies is a new highflyer.
North Dakota (1.28%)
New Jersey (1.28%)
On the flip side, Montana (0.62%), Colorado (0.61%) and Florida (0.48%) are among the states with the lowest concentration of middle market enterprises.
Manufacturing and Wholesale Trade Are Leading Sectors
Combined, the manufacturing and wholesale trade industries account for one-third of all middle market companies, and middle market firms in both industries experienced growth of at least 120% between 2011 and 2017.
Manufacturers and wholesalers are more likely to belong to the middle market segment of the economy compared to businesses in general; 17.6% of middle market firms are in the manufacturing sector compared to 3.2% of all firms, and 16.6% of wholesalers are middle market firms compared to 3.6% of all companies.
Women- and Minority-Owned Businesses on the Rise
The makeup of middle market firms has evolved over the past six years, with women- and minority-owned firms showing significant growth. The number of women-owned middle market firms skyrocketed 119.6% from 2011-2017, and women increased their share of all middle market enterprises by 1.2 percentage points during that time, from 6.0% to 7.2%.
While minority-owned firms make up just 5.5% of all middle market enterprises, the number of minority-owned firms jumped 85.8% since 2011. Middle market firms are 2.5 times more likely to be minority-owned as compared to all commercially active companies. Importantly, firms knocking on the door of the middle market − those generating at least $1 million in revenue − are more likely to be minority-owned businesses (5.9%).