Middle Market Executives Judge Economy on Personal Observation More Than Economic Indicators; See Data Security as Top Concern
October 29 2015 - 8:30AM
Business Wire
CIT Releases Annual Voice of the Middle Market
Study Highlighting the Perspectives of U.S. Middle Market
Executives
- Executives Feel Positive About Local
and U.S. Economies; Growing Concern About Global Economy
- Data Security Outpaces Affordable Care
Act, Economy and Tax Increases As Top Concern
- Donald Trump Preferred Republican
Candidate; Clinton Top Democratic Presidential Candidate
Despite the explosion of big data throughout Corporate America,
middle market executives are judging the state of the economy based
on personal experience and observation more than economic
indicators. Approximately three in five executives say the best way
to judge the U.S. economy is through observing the economic
stability of their community, friends, and coworkers. Less than
half (41%) say government data is a better way to judge the
economy. These are some of the key findings found in the fourth
annual Voice of the Middle MarketTM
(www.cit.com/middlemarketoutlook) study released today by CIT Group
Inc. (NYSE:CIT), a leading provider of commercial lending and
leasing services.
Although middle market executives are more optimistic about the
U.S. and global economies in 2015, they are still guarded as only
35% and 22% describe them as strong, respectively. Executives have
the most confidence in their local economies, with nearly half
describing it as strong.
An overwhelming majority (83%) reported data security as a
concern, up from 67% in 2014. With such prominent data breaches in
the news over the past year, data security outpaced concerns such
as the Affordable Care Act, regulations, and tax increases.
“Rather than relying only on data, our study revealed that
middle market executives judge the economy based on their own
experiences and from what they see impacting those close to them,”
said Jim Hudak, President of CIT Corporate Finance.
“Everything is local, and that’s especially true for the middle
market which really represents the Main Streets of the American
economy. Government statistics remain critically important, but if
a store on Main Street loses its lease, that has a significant
impact on how these executives view the economy.”
Jeff Kilrea, Group Head and Managing Director of CIT Sponsor
Finance, added, “A key takeaway from the study is that a large
majority of middle market executives (61%) completely agree that
policies coming out of Washington are more about scoring political
points than solving real problems. In fact, 45% of middle market
executives strongly feel like Washington doesn’t understand the
middle market. This data is valuable as it’s crucial that we
understand how middle market executives view key issues that are
impacting their businesses.”
KEY FINDINGS
- Positive Experiences with the
Economy: More than 60% of executives have had more positive
experiences, such as going on vacation or receiving a promotion,
than negative. Only about 20% have experienced more negative
experiences, such as employee layoffs, over the past year.
- Experiencing Strength and
Stability: About seven in ten executives describe their
company as strong. More than half (57%) say their company is doing
better than last year, with executives at companies with higher
revenue feeling this more strongly than executives at companies
with lower revenue. About three-quarters think their company will
likely increase the range of products and services offered in
current markets over the next 12 months, and more than two-thirds
(69%) expect to enter other regions within the U.S.
- View on the Lending Environment
Remains Positive: Similar to results from the 2014 Middle
Market Outlook, 91% of executives feel satisfied with their
company’s access to financing and the variety of financing
alternatives available to them. However, 19% of executives report
dissatisfaction with their company’s cost of financing. Nearly one
in three (30%) expect to use this financing to help U.S. expansion,
but even more (41%) expect to use it to invest in Information
Technology (IT).
- Middle Market Workforce
Expanding: About seven out of ten middle market executives
anticipate the middle market workforce will grow over the next 12
months. Sixty percent of executives reported having experienced
workforce growth over the last 12 months and only 6% have cut
back.
- Continued Dissatisfaction with
Elected Officials: Only 13% of executives surveyed approve of
Congress and 35% approve of President Obama’s job performance.
About nine in ten agree that Congress pays too much attention to
Fortune 500 companies, and that policy coming out of Washington
does not consider the needs of middle market businesses. A wide
majority (93%) believe Federal policies are politically motivated
rather than aimed at solving real problems.
- Trump Leading the
Pack: Nearly half (48%) of executives surveyed would
prefer a Republican in the White House while fewer than one in four
(23%) would prefer a Democrat. At 29%, Donald Trump garnered the
most support from middle market executives. Although he’s since
announced he is not running for office, Vice President Joe Biden,
along with Hillary Clinton, lead among potential Democratic
candidates, with slightly more than 20%.
- The Middle Market Acknowledges the
Value of Technology: Eighty percent of executives have seen an
increase in their IT budgets over the last three years, with 41%
reporting budgets growing more than 5%. More than three fifths
(64%) plan to increase their IT budget even further over the next
two years.
EDITOR’S NOTE:
CIT thought leadership content can be found at View from the
Middle™ (cit.com/viewfromthemiddle) and our CIT Point of View blog
(cit.com/pov). View our corporate video (cit.com/corporatevideo)
and follow us on Twitter, LinkedIn, YouTube and Facebook. Register
to receive press releases at cit.com/newsalerts.
About the Survey
KRC Research, on behalf of CIT, fielded an online survey among
406 U.S. middle market executives representing a range of
industries. Fieldwork was conducted in the United States in August
and September of 2015. In order to be eligible to participate in
the survey, respondents had to be in a leadership role at firms
with revenues between $25 million and $1 billion, the majority of
whose employees were based in the United States. Researchers
defined leadership roles as: Owner, C-Suite Executive (Chief
Executive Officer, Chief Operating Officer, Chief Financial
Officer, Chief Information Officer, Chief Investment Officer, or
other C-Suite title), or SVP/VP/Director.
About CIT
Founded in 1908, CIT (NYSE:CIT) is a financial holding company
with more than $65 billion in assets. Its principal bank
subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has
more than $30 billion of deposits and more than $40 billion of
assets. It provides financing, leasing and advisory services
principally to middle market companies across more than 30
industries primarily in North America, and equipment financing
and leasing solutions to the transportation sector. It also offers
products and services to consumers through its Internet bank
franchise and a network of retail branches in Southern California,
operating as OneWest Bank, a division of CIT Bank, N.A. cit.com
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CIT MEDIA RELATIONS:Matt Klein, 973-597-2020Vice
President, Media RelationsMatt.Klein@cit.comorCIT INVESTOR
RELATIONS:Barbara Callahan, 973-740 -5058Senior Vice
PresidentBarbara.Callahan@cit.com
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