IMA member RSM announces new partnership with Chamber of Commerce to advance middle market businesses…
The first quarter 2017 RSM US Middle Market Business Index (MMBI), released today, posted a record-high composite score of 129.8, up 9.7 points over the previous quarter, and 29.8 points above a baseline reading of 100, which indicates an expanding middle market. RSM US LLP (“RSM”) – the nation’s leading provider of audit, tax and consulting services focused on the middle market, along with the U.S. Chamber of Commerce, the nation’s largest business federation – joined forces to present the MMBI, in collaboration with Moody’s Analytics.
In conjunction with the release of the Q1 2017 MMBI results, RSM and the U.S. Chamber announced a new partnership dedicated to increasing awareness of the business and economic issues impacting the middle market, a crucial segment of the economy that represents more than one-third of U.S. jobs, 40 percent of U.S. GDP and more than 200,000 businesses.
“RSM launched the MMBI to help the broader business community and policymakers understand the issues affecting the middle market,” said Joe Adams, managing partner and CEO of RSM US LLP. “Partnering with the U.S. Chamber of Commerce is a powerful and natural extension of that mission. Together, we will work to highlight the needs of the middle market so we can continue to provide solid counsel, both to the companies we serve and key influencers who care about the viability of the middle market.”
“We are delighted to partner with RSM, a known leader serving the middle market, which comprises an important segment of our membership,” said Suzanne Clark, senior executive vice president at the U.S. Chamber of Commerce. “The more we understand about this sector of the economy, the better we can advocate for policies that accelerate growth and create jobs. The MMBI is a valuable resource to ensure the voice of the middle market is truly represented. Like the majority of respondents in this quarter’s index, we are optimistic about the future because we see a once-in-a-generation opportunity to enact major reforms that can drive America’s economic growth.”
Middle market businesses — those with annual revenues between $50 million and $1 billion — account for 40 million jobs (about one third of all U.S. jobs), 200,000 companies and 40 percent of the nation’s Gross Domestic Product (GDP). These companies contribute $6.2 trillion annually to the U.S. economy. Despite the obvious importance to the economy, middle market businesses have historically been underrepresented in mainstream economic and policy discussions due to lack of public data. The MMBI provides powerful insights to help the middle market gain share-of-voice in these important conversations.
According to RSM Chief Economist Joseph Brusuelas, data within the MMBI indicates improvement in both current and forward-looking expectations of revenues and earnings, with a super-majority of middle market leaders expecting tax and regulatory policy changes, as well as increased infrastructure spending to positively impact their businesses over the next two years.
Nearly 70 percent of respondents expect noticeable improvements in the economy over the next six months, which represents a fresh cyclical high in the index. Half of respondents believe tax reform provides the greatest opportunity for growth, while one in four believe renegotiated trade agreements pose the greatest risk for their business, followed by limits on immigration.
“Middle market leaders seem bullish on underlying fundamental improvement in the overall economic conditions over the past several months,” said Brusuelas. “Survey respondents have aggressively priced in operating improvements linked to policy changes. The promise of tax and regulatory reforms have had a near-term positive impact on their businesses; yet, it remains to be seen if these anticipated policy changes will live up to their expectations. Failure to deliver would represent a huge risk to the outlook.”
The MMBI also shows that employers are experiencing labor issues on two fronts – tightening of labor supply and a skills gap, coupled with lack of desire for people to take certain jobs:
74 percent of respondents reported a lack of qualified workers available for existing job openings, which also reflects the findings in the monthly Jobs, Openings, Layoffs and Turnovers data produced by the Federal Government.
71 percent of survey respondents reported issues with intra-industry competition for workers, 68 percent stated that it is difficult to find individuals interested in work in their industry and 69 percent implied that the cost of training for workers remains a challenge.
To access the complete survey results, visit the RSM website.