The Latest Installment of the Middle Market
Power Index Finds the Number of U.S. Mid-Sized Companies Has Nearly
Doubled Since 2011
Despite comprising only 1% of the total number of commercially
active firms1 in the country, middle market companies have led
national job growth over the past five years, employing nearly 53
million workers – more than double the number employed by this
segment in 2011. Middle market firms are also contributing $9.3
trillion to the U.S. economy, according to the Middle Market Power
Index from American Express (NYSE: AXP) and Dun & Bradstreet
(NYSE: DNB).
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Middle Market Geographic Concentration
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Using Dun & Bradstreet’s proprietary database of
commercially active U.S. firms, the latest report in the Middle
Market Power Index series analyzes the characteristics and economic
impact of middle market enterprises—defined as businesses
generating between $10 million and $1 billion in revenues—focusing
on growth trends over the past five years.
According to the report, while the total number of all
commercially active firms declined between 2011 and 2016, the
number of middle market firms nearly doubled, with an increase of
87%. Middle market firms generate just over one in four dollars
(26%) of U.S. business revenues and employ more than one in four
workers (27%) in the private sector. Since 2011, middle market
companies have outpaced both smaller businesses (less than $10
million in revenues) and the largest companies (more than $1
billion in revenues) in both employment and revenue growth.
“Over the last five years, middle market companies have led the
way in economic growth,” said Brendan Walsh, Executive Vice
President, U.S., American Express Global Commercial Payments. “This
report highlights the often overlooked economic might of these
companies, which contribute over $9.3 trillion to the U.S. economy
and are growing faster than any other sector.”
“Middle market firms continue to have an outsized influence on
the U.S. economy,” said Jeff Stibel, Vice Chairman of Dun &
Bradstreet. “These firms have led the charge hiring Americans and
now employ nearly 53 million people. The middle market plays a
pivotal role in our rapidly changing economy.”
Middle Market Geographic Concentration
Middle market companies are headquartered across the country.
However, the ten states in which middle market firms comprise a
greater than average share of companies include: Illinois (1.5%),
Wisconsin (1.5%), Michigan (1.3%), New Jersey (1.3%), Indiana
(1.2%), Kansas (1.2%), Massachusetts (1.2%), North Dakota (1.2%),
New York (1.2%) and Ohio (1.2%).
In addition to these ten states, higher than average percentages
of middle market firms are also found in Washington, D.C. (2.1%),
Puerto Rico (5.8%), and the U.S. Virgin Islands (3.6%).
While there’s been an 87% increase in the number of middle
market firms nationally over the past five years, four states saw
the number of middle market enterprises more than double during
that timeframe:
1. Ohio (+106%)2. Texas (+106%)3. Michigan
(+103%)4. Indiana (+102%)
According to the report, there are seven states in which middle
market companies are under-represented compared to the national
average:
1. Florida (0.5%)2. Colorado (0.6%)3.
Louisiana (0.6%)4. Montana (0.6%)5. Arizona (0.7%)6. New Mexico
(0.7%)7. Oregon (0.7%)
Middle Market Firms Owned by Women and Minorities
Roughly 6% of all commercially active firms are majority
women-owned, compared with 7% of middle market firms that have
majority women -ownership. Looking at minority ownership across all
commercially active firms, only 2% are minority-owned, compared
with 5% among middle market firms. Thus, in terms of gender and
ethnic diversity, firms that are women-owned are just as likely to
be found in the middle market as in other business size groups, and
minority business owners are more likely than average to be found
in the middle market (revenues of $10 million to $1 billion).
Potential for Further Growth in the Middle Market
Among the 18.9 million firms with less than $10 million in
annual revenue, there are roughly one million that generate
revenues between $1 million and $9.9 million, signifying the
greatest potential to approach the middle market. These firms make
up 5% of the population of commercially active small businesses,
generate $2.8 million in revenues and employ 28 workers on average.
These small businesses that have reached $1 million or more in
revenue are more likely to be women- or minority-owned (10% and 6%,
respectively) and also more likely retail trade or construction
businesses than any other business size group.
Industry Trends among the Middle Market
Middle market firms span all industries, but are more likely to
be found in the manufacturing sector (18% vs. 3% overall), followed
closely by wholesale trade (17% vs. 4% overall). Twelve percent of
middle market firms are found in retail trade, compared to 11% of
all commercially active businesses in the country. Within the
services sector, both educational services and health services are
home to 6% of middle market firms, respectively. Altogether, nearly
60% of middle market firms are found in these five industries.
To read the full Middle Market Power Index, please visit:
http://about.americanexpress.com/news/docs/2016x/GCP-Middle-Market-Power-Index-June-2016.pdf
American Express and Dun & Bradstreet will release
subsequent Middle Market Power Index reports, which will explore
other areas of opportunity unique to middle market firms.
Study Methodology
This report is based on an analysis of all of the U.S. firms in
Dun & Bradstreet’s commercial databases of over 19 million
(19,096,462) businesses between March 2011 and March 2016: (1) a
virtual census of all of the commercially active businesses in the
United States (defined as firms that have obtained a D-U-N-S®
Number and that sell and receive goods and services and utilize
credit transactions in their business); (2) their credit scoring
archive database, which collects and models business commercial
activity and business financial strength. All subsidiary and
business establishment data are combined; only enterprise-level
data (top of the business family tree, or Ultimate D-U-N-S®
Number firms) are reported. Additionally, public sector entities
are excluded.
Among the 19 million commercially active U.S. businesses in
2016, 182,578 firms have between $10 million and $999 million in
revenue and are thus defined as middle market enterprises.
Additionally, 17.9 million commercially active firms in the D&B
database have less than $1 million in revenues, and in this
analysis are referred to as small firms; just under 1 million
(964,600) have between $1 million and $9.9 million in revenues, and
are referred to as “nearing the middle market;” and 3,025 firms
generate $1 billion or more in revenues.
About Dun &
Bradstreet
Dun & Bradstreet (NYSE: DNB) grows the most valuable
relationships in business. By uncovering truth and meaning from
data, we connect customers with the prospects, suppliers, clients
and partners that matter most, and have since 1841. Nearly ninety
percent of the Fortune 500, and companies of every size around the
world, rely on our data, insights and analytics. For more about Dun
& Bradstreet, visit DNB.com.
About American Express Global
Commercial Payments
Through its Global Commercial Payments division, American
Express offers a suite of payment and lending products that help
businesses and organizations of all sizes gain financial savings,
control and efficiency. Global Commercial Payments provides
solutions for travel and everyday business spending, cross border
payments, global currency solutions, and business financing. To
learn more about Global Commercial Payments visit
business.americanexpress.com.
About American Express
American Express is a global services company, providing
customers with access to products, insights and experiences that
enrich lives and build business success. Learn more
at americanexpress.com and connect with us
on facebook.com/americanexpress,
foursquare.com/americanexpress, linkedin.com/company/american-express,
twitter.com/americanexpress,
and youtube.com/americanexpress.
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corporate responsibility.
1 Commercially active firms are defined as businesses that have
obtained a D-U-N-S® number, and that sell and receive goods and
services and utilize credit transactions in their business.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160601006064/en/
M BoothAlex Della Rocca212-539-3203alexd@mbooth.comorAmerican
ExpressMelissa Filipek212-640-8658melissa.j.filipek@aexp.comorDun
& BradstreetHeather Herndon310-919-2290hherndon@dandb.com
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