According to the Golub Capital Middle Market Report, middle market private companies in the Golub Capital Altman Index experienced approximate year-over-year earnings growth of 9.5% and revenue growth of 9.3% during the first two months of Q1/19.

This compares to approximate year-over-year earnings growth of 13.4% and revenue growth of 10.6% in Q4/18.

Lawrence E. Golub, CEO of Golub Capital, said, “U.S. businesses selling primarily in the domestic market are in great shape. The Golub Capital Altman Index posted nearly double-digit revenue and earnings growth in Q1, despite the U.S. government shutdown for most of January. The Technology sector, which for us consists primarily of business-to-business software companies, remains the standout, extending a nine-quarter streak of double-digit revenue growth and a four-quarter streak of double-digit earnings growth.

“These signs of fundamental strength, together with low unemployment, stable inflation and a moderating pace of wage growth, suggest the U.S. economy may not need additional support from the Fed in 2019.”

Credit expert Dr. Edward I. Altman added, “Revenue and earnings growth remain strong in our sample of U.S. middle market companies, although growth has decelerated moderately from the record pace of 2018. The turnaround we identified last year in the healthcare sector continued in the first quarter of 2019, as the healthcare companies in our sample maintained solid growth while increasing margins. Although the industrial companies in our sample reported relatively modest growth, their focus on the U.S. domestic market appears to have insulated them from concerns about growth and trade in the global economy. In sum, our data suggests the U.S. economy has retained much of its momentum from 2018.”

Altman is the Max L. Heine Professor of Finance, Emeritus at the NYU Stern School of Business and director of Research in Credit and Debt Markets at the NYU Salomon Center for the Study of Financial Institutions. He is currently an advisor to several foreign central banks.