Top 25 Most Populous Metropolitan Areas House
40% of Nation’s Middle Market Firms, Account for 326 Employees Per
Firm on Average and Generate Roughly $54 Million in Revenue
There is a reciprocal relationship between middle market firms
and the metropolitan areas in which they operate, as uncovered by
the Middle Market Power Index: Best U.S. Metropolitan Areas for
Middle Market Firms from American Express (NYSE: AXP) and Dun &
Bradstreet (NYSE: DNB). Metro areas provide infrastructure and
talent that attracts companies, and employees are drawn to certain
metro areas by their perceived culture, quality of life, and
opportunities. At the same time, middle market companies offer a
critical foundation for metro areas looking to maintain or
strengthen their economy.
The Middle Market Power Index series, which began in 2015,
analyzes the characteristics and economic impact of middle market
enterprises—defined as businesses generating between $10 million
and $1 billion in revenues. This report, which is the eighth in the
series, explores why certain metro areas are more conducive to
middle market firms than others, and why the presence of a strong
middle market matters. The report measures the condition of a metro
area’s middle market sector including the number of middle market
firms, their overall number of employees, their overall revenue
generated, the average number of employees per firm, average
revenue per firm, and revenue per employee.
“We hypothesized that there is an important relationship between
middle market firms and the metro areas in which they operate, but
the findings from this report really show how close and
interdependent that relationship is,” said Brendan Walsh, Executive
Vice President, American Express Global Commercial Payments. “When
metro areas have a strong middle market presence and those firms
are highly productive, they are able to rebuild faster, stay more
competitive, and provide for a dynamic local economy.”
Middle Market Economic Impact on 25 Most Populous U.S. Metro
Areas
New York City has the most middle market firms, which is an
important contributor to its role as an economic powerhouse. The
typical New York City middle market firm is larger than those in
other metro areas in terms of average number of employees and
average revenues. In 2017, New York City had the most middle market
firms (7,925 of the nearly 180,000 in the U.S.), a higher than
average number of employees per firm (395 compared to the national
average of 293), and the highest total revenue generated (roughly
$66M compared to $52M nationally).
These statistics are partially thanks to the sheer size of the
New York metro area. When factoring in productivity however, which
is measured by the amount of goods and services a worker produces
and is a fundamental contributor to economic health, New York does
not rank quite as high. With many more employees per middle market
firm, yet only slightly higher average revenue per firm, New York
ranks 16th for revenue generated per employee.
Several other metro areas have healthy economies and rank highly
for productivity. The greater Houston area’s middle market firms
generate the highest average revenue per employee – $215,107, which
is nearly $40,000 higher than the U.S. average ($176,000) and
nearly $100,000 higher than Orlando-Kissimmee-Sanford ($119,701) –
which ranked the lowest for productivity.
The top five ranking metropolitan areas for productivity
are:
1. Houston-The Woodlands-Sugar Land, TX
($215,107 average revenue per employee)
2. Los Angeles-Long Beach-Anaheim, CA
($203,734 average revenue per employee)
3. Miami-Fort Lauderdale-West Palm Beach, FL
($198,902 average revenue per employee)
4. Riverside-San Bernadino-Ontario, CA
($197,312 average revenue per employee)
5. Philadelphia-Camden-Wilmington, PA, NJ, DE
($187,616 average revenue per employee)
Alternatively, the five lowest ranking metropolitan areas for
productivity are:
1. Orlando-Kissimmee-Sanford, FL ($119,701
average revenue per employee)
2. San Antonio-New Braunfels, TX ($122,912
average revenue per employee)
3. Detroit-Warren-Dearborn, MI ($137,454
average revenue per employee)
4. Tampa-St. Petersburg-Clearwater, FL
($150,190 average revenue per employee)
5. Baltimore-Columbia-Townson, MD ($150,787
average revenue per employee)
A full analysis of average revenue per employee, average revenue
per firm, and average number of employees per firm can be found in
the full report.
Where Middle Market Firms Shine Brightest
In addition to productivity, the report also ranks middle market
dominance (a combined ranking of a city’s individual rankings for
share of middle market firms, total employment, and total revenue),
economic clout (a ranking based on the combined growth rate from
2009 to 2017 in terms of the number of firms and growth in
employment and revenues), employment vitality (analysis of a metro
area’s employment growth rate from 2009 to 2017 and the average
number of employees), and diversity among minority-owned and
women-owned firms (a ranking of the share and growth of these
businesses).
While most large cities and their surrounding areas have diverse
talent pools, university hubs, and the capacity to attract people
from other states and countries, smaller metro areas also have a
crucial characteristic that is generally not shared by their larger
counterparts — affordability. This plays a role in these cities’
high rankings for metrics such as middle market dominance, economic
clout, employment vitality, and minority-owned/women-owned
businesses.
Some notable findings among these metrics includes:
- Dallas – ranks high for four of
the five categories: economic clout (2nd), employment vitality
(4th), and diversity difference -- both minority (3rd) and
women-owned businesses (3rd). It ranks low for middle market
dominance (17th).
- Detroit – ranks high for three
of the categories: middle market dominance (1st), economic clout
(3rd), and employment vitality (3rd). It has a split ranking for
diversity difference -- having a low share of minority-owned
businesses (20th), and a somewhat low share of women-owned
businesses (11th).
- Denver – ranks high for economic
clout (5th), somewhat high for employment vitality (6th), share of
minority (9th)- and women-owned businesses (6th), and somewhat low
for middle market dominance (12th).
“The metro areas with the strongest middle market presence are
in many cases not the most obvious,” said Nalanda Matia, Senior
Director of the Econometrics Practice at Dun & Bradstreet.
“It’s no surprise that New York leads the nation in many of the
metrics we analyzed, but it was interesting to see how well
geographies such as St. Louis and San Diego performed in middle
market dominance. This can provide important guidance for similar
markets as they evolve in the months and years ahead.”
Middle market firms are key to a resilient economy – whether it
is Houston recovering from a natural disaster or Baltimore and
Detroit reviving their economies – these firms have a natural
advantage: they are substantial enough to have the human and
capital resources needed to withstand hard times (averaging 293
employees and generating $51.6 million in revenues), yet small,
agile and nimble enough to take advantage of new opportunities.
To read the full Middle Market Power Index, please visit
http://about.americanexpress.com/news/docs/mmpi-growth-smart.pdf.
Study Methodology
This report is based on an analysis of all of the U.S. firms in
Dun & Bradstreet’s (D&B) commercial databases between March
2011 and March 2017. The first database is 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 use credit transactions in their
business).The second is D&B’s credit scoring archive database,
which collects and models 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 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, instagram.com/americanexpress,
linkedin.com/company/american-express, twitter.com/americanexpress,
and youtube.com/americanexpress.
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About Dun &
Bradstreet
Dun & Bradstreet (NYSE: DNB) grows the most valuable
relationships in business. By uncovering truth and meaning from
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clients and partners that matter most, and have since 1841. Nearly
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more about Dun & Bradstreet, visit DNB.com. Twitter: @DnBUS
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