COLUMBUS, OH – Nearly two-thirds (64 percent) of the Buckeye State’s 5,000 middle-market businesses say overall company performance improved in the past year. In fact, 73 percent of C-suite executives say revenue growth increased over the past 12 months at an average rate of 6.8 percent, and 74 percent added employees during the same timeframe at an average rate of 6.3 percent. By comparison, revenue growth is consistent with national middle-market trends (6.6 percent), while employment growth is nearly double (3.2 percent).
This first-of-its-kind research was conducted in collaboration with the National Center for the Middle Market, the Ohio Chamber of Commerce, the Greater Cleveland Partnership, and other Ohio metro chambers of commerce. It surveyed 102 executives (CEOs, CFOs, and other C-Suite executives) from mid-sized firms statewide to investigate past year growth, anticipated growth, confidence in the economy, and challenges.
“Middle-market companies in our region continue to make a strong showing,” said GCP President and CEO Joe Roman noting that more half of the middle-market companies in the state are located in Northeast Ohio. “Their resiliency and strength continue to drive our economy in a positive direction which is why GCP is focusing its resources through our Middle-Market Initiative to address the needs of these companies.”
Defined as companies with annual revenues between $10 million and $1 billion, Ohio’s middle market employs nearly two million workers or 37 percent of all jobs, although these companies represent represent on 1 percent of all Ohio businesses. In addition, Ohio’s middle-market companies generated $226 billion in revenues last year.
Positive outlook: Strong revenue and job growth rates
The outlook for continued growth ahead is positive, with gross revenue projections accelerating in the coming year. Some 87 percent of Ohio mid-market executives say revenue will increase over the next 12 months at a mean growth rate of 9.1 percent, which is well ahead of national peers at 5.8 percent. More than half (59 percent) say employment will increase as well at a mean growth rate of 5.8 percent, which is faster than national averages of 3.2 percent. These leaders say growth is being driven by new business, increased demand, and plans for expansion.
Confidence in the local and state economy is high, with 82 percent and 80 percent, respectively, saying they are at least somewhat confident. Ohio’s middle market leaders are less confident about the broader U.S. economy (62 percent vs. 68 percent nationally) and express some pessimism about the global economy (42 percent vs. 55 percent nationally).
Challenges persist: Healthcare a major concern
Despite a positive growth outlook, mid-market firms in Ohio are confronting a number of challenges. The cost of healthcare is cited as a significant concern by 88 percent of business leaders.
“GCP recognizes the imperative of addressing this challenge,” said Bernie Moreno, president of The Collection Auto Group and chair of GCP’s Middle-Market Committee. “Earlier this year, in collaboration with Medical Mutual, we rolled out a consumer-driven health plan solution specifically for middle-market companies. The Middle Marketplace gives employees a specific amount to spend on their healthcare benefits, and they select the best plan for them from a variety of plan options.”
Business leaders also cited the ability finding and retaining talented employees (87 percent) as key issues affecting future growth. Nearly all firms (87 percent) have at least one open position and the majority of positions are for full-time workers. One-third of firms are looking to hire 11 or more workers.
In particular, 68 percent of middle market executives are having difficulty finding qualified candidates to fill open positions. Moreover, the employment areas with the greatest need are operations (58 percent), marketing/sales (47 percent) and manufacturing (42 percent).
“Through partnerships with local chambers of commerce and economic development groups in key states like Ohio, the Center is taking a deeper look at the middle market—not only through a national lens, but also at the regional and state levels,” said Thomas A. Stewart, executive director for the National Center for the Middle Market. “The results of the study provided data and insights that can be used to inform policy and develop programs for driving local business growth and employment.”
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About the National Center for the Middle Market
The National Center for the Middle Market (NCMM) was founded in 2011 in partnership with GE Capital and is located at The Ohio State University Fisher College of Business. The Center is the nation’s leading research institution dedicated to helping middle market companies be more competitive through impactful research, thoughtful advocacy, and educational programs. www.middlemarketcenter.org
About the Ohio Chamber of Commerce
Founded in 1893, the Ohio Chamber of Commerce is Ohio’s largest and most diverse statewide
business advocacy group. The Chamber works to promote and protect the interests of its 8,000
business members, large and small, while building a more favorable business climate. Learn more at http://ohiochamber.com/
About the Greater Cleveland Partnership
The Greater Cleveland Partnership mobilizes private-sector leadership, expertise and resources to create attractive business conditions that create jobs, grow investment and improve the economic prosperity of the region. www.gcpartnership.com
. Twitter: @GCPartnership