Middle-Market Manufacturers are Untapped Driver of Job Growth
Top policy and business leaders examined the untapped potential of the nation’s 200,000 middle-market companies to create jobs and grow the economy in a panel discussion convened at GE’s What Works Summit on American Competitiveness.
The discussion was based on research findings from the largest-ever study of the U.S. middle market, which highlighted the resiliency of middle market companies in spite of enduring challenges. This survey was a collaborative effort by The Ohio State University Fisher College of Business and GE Capital.
Middle-market companies, those with revenues between $10 million and $1 billion, encompass some 41 million jobs, 34% of total private employment and generate over $9 trillion in combined revenues annually-making them critical to America’s competitiveness and future.
“Middle-market companies represent critical opportunities for job creation and economic growth,” said Tom Quindlen, president and CEO of GE Capital, Corporate Finance. “As policymakers consider new initiatives to put Americans back to work and to keep our nation on the cutting edge of manufacturing innovation, they must not forget the enduring challenges and significance of middle market companies.”
Manufacturers are the second largest industry concentration of middle-market firms, representing 17.3% of the sector, according to the study. Compared to their peers in other industries, more middle market manufacturers are longer enduring enterprises and have higher levels of employment. “Middle-market manufacturers are currently experiencing a pronounced phase of growth, yet they have real concerns about regulatory compliance and competitiveness that deserve Washington’s attention,” said Anil Makhija, academic director for the National Center for the Middle Market. “They lack a formal advocate and the resources to share their views on the policy agenda. Today’s forum presents a meaningful opportunity to convene a dialogue around how to better support the growth and potential of the middle market.”
While middle-market manufacturers boasted relatively favorable balance sheets and levels of corporate debt, they reported lower access to capital markets and greater pressure from international competition than peers in other industries. Manufacturers in this sector considered lower cost of capital and the ability to restructure debt as key components to their ability to grow.
Several key concerns identified by middle-market executives who participated in the study reflect the sentiment of American businesses nationwide, including:
Full survey results are available on the National Center for the Middle Market’s website, www.middlemarketcenter.org/.
The Ohio State University Fisher College of Business (Fisher) and GE Capital have partnered on a foundational, multi-source research initiative on the U.S. middle market. Their recently released report polled more than 2,000 business leaders across the United States on their business, their capabilities and performance, their growth needs and their overall economic outlook.