More than 90 percent of mid-market companies expect the U.S. economy to grow this year. That’s according to a new survey by Deloitte.
The “Mid-Market Perspectives: 2011 Report on America’s Economic Engine” also finds that almost 56 percent of the companies surveyed will focus on domestic growth this year, while 44 percent of firms with annual revenue of more than $500 million will focus on global expansion.
The research firm Economist Intelligence Unit conducted the survey of mid-market CEOs and executives from across the country. The survey gauges mid-market businesses’ plans for growth and recovery following the Great Recession. According to the report, more than 72 percent of respondents say they are now seeing higher productivity than before the recession.
Of the 527 senior decision-making executives surveyed, 69 percent say they plan on adding full-time employees this year; 38 percent will pursue financing to expand business; and 81 percent expect their annual revenue to increase in 2011.
Two-thirds of the companies report lower debt ratios today compared to pre-recession years. Also, more than half report higher cash balances. In addition, more than 60 percent of the companies agree cash balances will remain high, while debt ratios will remain low.
According to Tom McGee, national managing partner of Deloitte Growth Enterprises Services, Deloitte LLP, the mid-market’s role is important to the economy due to its tremendous revenue. Mid-market companies comprise 40 percent of the national gross domestic product and employ nearly 25 million people.
Although the survey reports an optimistic outlook for the U.S. economy, obstacles lay ahead. Executives believe government debt and the strength of the economic recovery could hinder growth. Half of all respondents cite government debt at the federal, state and municipal levels as the primary economic challenge.
The survey also found:
- Executives are concerned that regulation, health care costs and high tax rates will hinder growth in the long- and short-term.
- Only 20 percent of executives believe the economy will grow quickly enough to support widespread job creation.
- Only 8 percent of the 80 percent of privately held companies surveyed plan to go public in the next year, with nearly 70 percent of those attributing decision-making control as the primary reason for remaining private.
The companies surveyed include private and public companies with annual revenue between $50 million and $1 billion, with the most-represented industries being business/professional services, consumer/manufactured goods, and health care, pharmaceuticals and life sciences.