NCMM – Croixstone

The Sizzling Middle Market

Croixstone and the Middle Market. As a boutique management consulting and executive search firm, Croixstone serves a national portfolio of clients of all sizes. That said, Croixstone dedicates significant time and expertise in serving Middle Market clients.

What is the Middle Market? As defined by the experts at the National Center for the Middle Market (NCMM), the U.S. Middle Market is comprised of companies with annual revenues between $10 million and $1 billion. While the Middle Market represents 200,000 businesses (or 3% of all U.S.companies), it accounts for a whopping one-third of private sector GDP and jobs.

What’s happening in the Middle Market? As published in the NCMM’s “Year-End 2023 Middle Market Indicator Report”, the U.S. Middle Market is flourishing in the post-COVID era. The rate of year-over-year revenue growth in 2023 reached an all-time high (12.4%) with 55% of Middle Market companies reporting double-digit growth compared to 2022. The majority of Middle Market companies grew employment, however, the overall rate of year-over-year employment growth slowed.

What are the fastest-growing Middle Market companies doing to drive performance? According to the NCMM, the fast growers are expanding through innovation and entry into new markets. Additionally, they are actively investing in technology and people. These pacesetters tend to demonstrate a greater interest in digitization and AI. They also report a higher average increase in wages for their workforces compared to slower-growing companies.

Learn more. The NCMM provides knowledge, leadership, and innovative research on the U.S. Middle Market. Housed at The Ohio State University Fisher College of Business, NCMM is a collaboration between the University, Chubb, and Visa. Click here to learn more about the NCMM and to review the “Year-End 2023 Middle Market Indicator Report”.

Insights into the Middle Market

Croixstone is laser focused on providing expertise to serve the middle market, defined as those companies with annual revenues between $10 million and $1 billion. T he National Center for the Middle Market recently published new data and insights on this important sector of the economy that we found interesting.

While representing barely 3% of all U.S. businesses, the middle market is responsible for 1/3 of private sector GDP and employment.

If the U.S. middle market were its own country, it would be the fifth-largest economy in the world.

During the pre-pandemic era from 2012-2019, average revenue growth for midsize companies was 6.5% and average employment growth was 4.3%.

A Q4 2020 middle market survey showed that average revenue declined by 1.2% and employment dropped by 2.2% over the prior 12 months.

While the pandemic negatively impacted the middle market, the sector overall performed better than small businesses and large corporations.

Middle market companies are typically very resilient, however, the ongoing pandemic presents a serious challenge on how to maintain customer engagement and connectivity.

Learn more here.