Latest Middle Market Power Index from American
Express and Dun & Bradstreet Shows Significant Growth in Number
of Firms, Revenue and Employment Since 2011
The growth of U.S. middle market firms (companies between $10
million and $1 billion in revenues) is outpacing the national
average, with an 87% increase in number of firms, a 103% surge in
employment, and a 100% rise in revenue since 2011, according to the
latest Middle Market Power Index: A Detailed Look at Top Industries
from American Express (NYSE:AXP) and Dun & Bradstreet
(NYSE:DNB).
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An industry sector analysis of this middle market growth can
help uncover larger economic trends, which have implications for
workforce development and economic investments. Within the sectors
that include most middle market firms – manufacturing (18%),
wholesale trade (17%), and business services (11%) – several
industry subcategories are fueling the growth in number of firms
since 2011:
- Business services – Legal services
(284%)
- Manufacturing – Industrial, commercial,
or computer equipment (163%)
- Wholesale trade – Durable products
(160%)
The previous Middle Market Power Index: Fueling the Nation’s
Economic Growth found that middle market companies are powering the
U.S. economy – as much as 53% of the net new jobs over the past
five years have come from middle market companies. The latest
report found that the subcategories experiencing the strongest
employment growth are generally also undergoing the strongest
revenue growth. Two areas in particular, legal services and durable
products, have led their industries in all three measures,
indicating these are becoming more prominent in the American
economy.
“Middle market firms are leading business growth in the United
States, outpacing both small and large-sized firms,” said Jeff
Stibel, vice chairman of Dun & Bradstreet. “More specifically,
the service industry continues to lead middle market growth in
terms of revenue, employment and number of firms, reflecting the
larger trend in the U.S. moving from a manufacturing-based to a
service-driven economy.”
Generational Differences among Middle Market Firms
As our economy becomes more service and technology focused, it
stands to reason that the younger firms entering the middle market
are not going to be producing the same products or services as
companies that were founded over 50 years ago.
Manufacturing is one industry where this generational difference
is particularly strong. While it remains a foundational sector
regardless of firm age, the types of products being manufactured
differ between younger and older middle market firms. Middle market
firms that have been in business for 50 years or more are much more
likely than their youngest counterparts (those in business less
than 10 years) to be making fabricated metal products – 17% vs.
10%. The youngest middle market manufacturing firms are instead
much more likely than those in business 50 years or more to
manufacture either electronic equipment or components (11% vs. 5%)
or chemical products (12% vs. 5%). The shift in types of products
being manufactured suggests how demand for certain goods has
changed over time.
Although manufacturing is the most prevalent middle market
industry, business services is seeing significant gains as well.
Middle market firms that have been in business 10 years or less are
more likely to be in business services (15%) compared to those that
have been in business 50 years or more (5%). Within business
services, the subcategory of legal services has been driving growth
in number of firms, employment, and revenues and is dominated by
middle market firms that have been in business 50 years or more.
These older firms represent 25% of middle market legal services
companies, compared to 2% of middle market legal services firms
that have been in business less than 10 years. This can be an
indicator that, while legal services have led growth in this
sector, it takes much longer for firms in this industry to
scale.
“Middle market companies are not only driving the national
economy in terms of revenue and employment growth, but the most
transformative middle market industries are shaping the overall
direction of our economy,” said Brendan Walsh, Executive Vice
President, U.S., American Express Global Commercial Payments. “The
success of younger manufacturing companies in the middle market is
a key indicator of how technology is influencing and guiding the
future of the industry, while the growth of business services as a
focus for younger middle market companies reflects the
strengthening knowledge economy.”
Read the full Middle Market Power Index report here.
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 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.
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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M BoothRyan Walker212-388-7677ryanw@mbooth.comorAmerican
ExpressMelissa Filipek212-640-8658melissa.j.filipek@aexp.comorDun
& BradstreetHeather Herndon310-919-2290hherndon@dandb.com
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