Jun 19, 2018 - 3:30pm

Middle Market Companies Continue Their Positive Economic Outlook

Middle market companies remain optimistic in 2018, a new survey finds.

The RSM US Middle Market Business Index (MMBI), presented by RSM in partnership with the U.S. Chamber of Commerce, remains robust in the second quarter of 2018, with business leaders signaling strong, positive, forward-looking expectations on revenues, earnings, hiring, and compensation.

In the second quarter of 2018, the MMBI posted a composite score of 134.5, a slight 2.2-point decrease from last quarter’s record-high of 136.7. A score above 100 indicates an expanding middle market.

Companies are pleased with the Tax Cuts and Jobs Act (TCJA) – 54% said further reductions in the corporate tax rate would improve growth conditions.

Many of them are using their tax savings to attract more workers and invest in their workforces. Those companies familiar with the tax cut that expect it to have a strong impact on their after tax cash flow. 62% intend to increase hiring, 65% to increase compensation, and 54% expect to give a one-time bonus or payment to labor – consistent with survey data indicating a lack of available labor as the top issue facing middle market businesses.

“We expect to continue to see optimism from middle market business leaders, and we are excited by the growth opportunities tax reform will have on their businesses and the broader economy,” said Neil Bradley, executive vice president and chief policy officer for the U.S. Chamber of Commerce. “Pro-growth policies like tax reform and deregulation make American businesses more competitive, improve cash flow, and encourage investment here at home.”

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