According to CIT Group’s Voice of the Middle Market study, 80% of executives in the space foresee expansion and diversification over the next 12 months. Additionally, although a slight majority (55%) believe their local economy is strong, most express near-term apprehension over the state of the national (44%) and global (31%) economies.
Jeff Kilrea, group head and managing director of CIT Sponsor Finance, said, “This study is vital to how we do business, and it helps CIT to better understand the middle market perspective. An important finding of the study is that middle market executives are still more directly influenced by personal measures like personal experiences and company performance than they are by more objective measures like government data and the media. Their confidence remains in what’s local, and it has shaped how they view the economy as a whole.”
In the wake of recent terrorist acts, 87% of middle market executives say that it is important to their company that the new session of Congress in 2017 addresses terrorism. Concerns over tax reform (86%), cyber security (84%), reduced federal spending (84%) and healthcare reform (79%) follow closely behind.
While middle market executives do not express one crystal clear vision of Congress, the majority are in relative agreement that changes in the regulatory environment like the Trans-Pacific Partnership (63% support its passage) and the Dodd-Frank Act (80% saying it has made it easier or made no difference to get capital needed) have been or will be good – or at least neutral – with respect to their business.
Other key findings of the study include:
- Middle market executives are generally optimistic about what the future will hold for their companies, with an overwhelming 81% foreseeing growth into adjacent markets over the next 12 months. In addition, 51% of middle market executives surveyed believe that their company will be buying/acquiring another company over the course of the next year.
- Of those surveyed, 44% of middle market executives think Congress is doing too little to support middle market businesses, 37% say Congress is doing a sufficient amount and 19% say it’s doing too much.
- There is pervasive optimism about the state of financing for middle market executives. At least nine in 10 are satisfied with their current banking relationship (91%) and/or their financial lender (92%). And nearly the same proportion feels comfortable with the options for, access to and cost of financing (88%, 91% and 86%, respectively).
- Over the next 12 months, more than three in four middle market executives (78%) believe the workforce at their company will increase. However, nearly two in three executives (64%) agree that when it comes to their current workforce, they are expected to accomplish more with fewer employees.