The Latest Installment of the 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
Middle market firms are outpacing their smaller and larger
counterparts when it comes to growth in number of firms,
employment, and revenue, according to the Middle Market Power Index
from American Express (NYSE:AXP) and Dun & Bradstreet
(NYSE:DNB). The seventh report in the Middle Market Power Index
series analyzes the characteristics and economic impact of middle
market enterprises—defined as businesses generating between $10
million and $1 billion in revenues—using Dun & Bradstreet’s
proprietary database of commercially active1 U.S. firms, over the
past six years.
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The latest report finds that middle market firms substantially
improved the nation’s economic health between 2011 and 2017. 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.
Currently, middle market firms employ more than one in four U.S.
workers (27.2%) and are responsible for much of the job growth in
recent years. Of the 51.8 million new jobs that were created since
2011, 26.8 million (or 51.7%) were created by middle market firms.
Middle market firms also lead the way in revenue growth and account
for more than one quarter (26.8%) of all revenue produced by U.S.
businesses, equating to roughly $9.3 trillion.
“Although small in number, middle market companies pack a large
economic punch,” said Brendan Walsh, Executive Vice President,
American Express Global Commercial Payments. “What our Middle
Market Power Index shows us is that economic growth does not always
come from the most expected places. 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.”
Middle Market Firms Choose Middle America
Commercially-active U.S. middle market companies can be found
throughout the country, and there are seven states that have the
greatest concentration:
- Illinois (1.55%)
- Wisconsin (1.53%)
- Michigan (1.36%)
- Ohio (1.29%)
- North Dakota (1.28%)
- New Jersey (1.28%)
- Kansas (1.26%)
In addition to these states, high concentrations of middle
market companies are also found in Washington, D.C. (2.13%) and
territories including Puerto Rico (5.32%) and the U.S. Virgin
Islands (2.94%). 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.
Overall, the total number of middle market firms soared 83.9%
over the past six years, signaling vitality and agility in this
segment. During that time, three states more than doubled their
number of middle market companies:
- Texas (+104.1%)
- Ohio (+102.2%)
- Michigan (+100.5%)
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. In general, 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.
Of the ten states with the largest number of middle market
manufacturers, Michigan and Ohio stand out for their growth in
numbers between 2011 and 2017: 159.1% and 152.7%, respectively.
Areas with the lowest rate of growth in the number of middle market
manufacturers between 2011 and 2017 include the U.S. Virgin Islands
(0.0%), Alaska (15.4%), Puerto Rico (29.1%), Washington DC (64.7%)
and Nebraska (82.6%).
Exporting Demonstrates an Important Opportunity for the
Middle Market
International trade is increasing among middle market companies.
While only 6.9% of middle market firms currently export, this
number has been on the rise over the past six years. Since 2011,
the number of middle market enterprises that export their goods and
services has quadrupled.
Of the larger states, North Carolina had the highest overall
growth rate in the number of middle market firms that export their
goods or services: 540.7%. Other states and territories with
exceptionally high growth rates in middle market exporting
include:
- The U.S. Virgin Islands 900.0%
- Delaware 833.3%
- Idaho 766.7%
- Hawaii 633.3%
- Vermont 633.3%
Areas with the lowest rates of growth in the number of middle
market firms that export are Washington DC (0.0%), Montana (57.1%),
South Dakota (83.3%), Puerto Rico (112.1%) and Oklahoma
(195.8%).
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%).
To read the latest Middle Market Power Index, please visit
http://about.americanexpress.com/news/docs/middle-market-power-index-2017.pdf.
Study Methodology
This report is based on an analysis of all of the US firms in
Dun & Bradstreet’s (D&B’s) commercial databases between
March 2011 and March 2017. The first database is a virtual census
of all of the commercially active businesses in the United States
(defined as firms that have obtained a D-U-N-S® Number and that
sell and receive goods and services and use credit transactions in
their business).The second is D&B’s credit scoring archive
database, which collects and models commercial activity and
business financial strength. All subsidiary and business
establishment data are combined; only enterprise-level data (top of
the business family tree, or Ultimate D-U-N-S Number firms) are
reported. Additionally, public sector entities are excluded.
About American Express Global
Commercial Payments
Through its Global Commercial Payments division, American
Express offers a suite of payment and lending products that help
businesses and organizations of all sizes gain financial savings,
control and efficiency. Global Commercial Payments provides
solutions for travel and everyday business spending, cross border
payments, global currency solutions, and business financing. To
learn more about Global Commercial Payments visit
business.americanexpress.com.
About American Express
American Express is a global services company, providing
customers with access to products, insights and experiences that
enrich lives and build business success. Learn more at
americanexpress.com and connect with us on
facebook.com/americanexpress, instagram.com/americanexpress,
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About Dun &
Bradstreet
Dun & Bradstreet (NYSE:DNB) grows the most valuable
relationships in business. By uncovering truth and meaning from
data, we connect our customers with the prospects, suppliers,
clients and partners that matter most, and have since 1841. Nearly
ninety percent of the Fortune 500, and companies of every size
around the world, rely on our data, insights and analytics. For
more about Dun & Bradstreet, visit DNB.com. Twitter: @DnBUS
1 Commercially active firms are defined as businesses that have
obtained a D-U-N-S® number, and that sell and receive goods and
services and utilize credit transactions in their business.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170815005287/en/
M BoothRyan Walker, 212-388-7677ryanw@mbooth.comorAmerican
ExpressMelissa Filipek, 212-640-8658melissa.j.filipek@aexp.comorDun
& BradstreetLauren Simpson, 310-919-2230simpsonl@dnb.com
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