Middle Market Executives Are Optimistic for Growth but Less Confident about National and Global Economies; See Terrorism and Tax Reform as Top Priorities for Congress in 2017
CIT Releases Annual Voice of the Middle Market Study Highlighting the Perspectives of U.S. Middle Market Executives
- Greatest Confidence in Strength of Business, Less for National and Global Economies
- Optimistic Outlook for Expansion and Product Development
- Plans for Workforce Growth Over the Next 12 Months
NEW YORK, October 26, 2016–(BUSINESS WIRE)–Middle market executives remain generally optimistic about the strength of their businesses, with at least 80% foreseeing expansion and diversification over the next twelve months. Though a slight majority (55%) believes their local economy is strong, most express near-term apprehension over the state of the national (44%) and global (31%) economies. These are just some of the key findings found in the fifth annual Voice of the Middle MarketTM study released today by CIT Group Inc. (NYSE:CIT), a leading provider of commercial lending and leasing services.
Jeff Kilrea, Group Head and Managing Director of CIT Sponsor Finance, said, “This study is vital to how we do business, and it helps CIT to better understand the middle market perspective. An important finding of the study is that middle market executives are still more directly influenced by personal measures like personal experiences and company performance than they are by more objective measures like government data and the media. Their confidence remains in what’s local, and it has shaped how they view the economy as a whole.”
In the wake of recent terrorist acts, 87% of middle market executives say that it is important to their company that the new session of Congress in 2017 addresses terrorism. Concerns over tax reform (86%), cyber security (84%), reduced federal spending (84%), and healthcare reform (79%), follow closely behind.
While middle market executives do not express one crystal clear vision of Congress, the majority are in relative agreement that changes in the regulatory environment like the Trans-Pacific Partnership (63% support its passage) and the Dodd-Frank Act (80% saying it has made it easier or no difference to get capital needed) have been or will be good – or at least neutral – with respect to their business.
- The Greatest Confidence Lies in the Strength of Business, Less for National and Global Economies: More than half of middle market executives (55%) believe the current state of their local economy is very strong/strong. Far fewer feel the same way about the U.S. economy (44%) and even fewer for the global economy (31%). However, executives are more optimistic than in 2015 about all three economies (47% for the local economy, 35% for the U.S. economy, and 22% for the global economy a year ago).
- Growth Expected over the Next 12 Months: Middle market executives are generally optimistic about what the future will hold for their companies, with an overwhelming 81% foreseeing growth into adjacent markets over the next 12 months. 51% of middle market executives surveyed believe that their company will be buying/acquiring another company over the course of the next year.
- No Clear Consensus on the Impact of Congress: 44% of middle market executives think Congress is doing too little to support middle market businesses, 37% say Congress is doing a sufficient amount and 19% say it’s doing too much.
- Nearly all A’s for Financing: There is pervasive optimism about the state of financing for middle market executives. At least 9 in 10 are satisfied with their current banking relationship (91%) and/or their financial lender (92%). And nearly the same proportion feels comfortable with the options for, access to, and cost of financing (88%, 91%, and 86%, respectively).
- There’s a Growing Demand for Staff: Over the next 12 months, more than 3 in 4 middle market executives (78%) believe the workforce at their company will increase. However, nearly 2 in 3 executives (64%) agree that when it comes to their current workforce, they are expected to accomplish more with fewer employees.
About the Survey
This survey was conducted online within the United States by Harris Poll on behalf of CIT from July 25 to August 16, 2016 among 517 U.S. executives representing a range of industries, of which 363 executives are employed at mid-sized companies. Qualified middle market executives were age 24+, employed full-time, working in selected industries with revenue between $25 million and $1 billion, 10 or more employees, and a majority of employees based in the U.S. as well as having one of the following titles: Owner, Board Member, C-suite executives (Chief Executive Officer (CEO), Chief Operating Officer (COO),Chief Financial Officer (CFO), Chief Information Officer (CIO), Chief Investment Officer, Other C-level executive), Sr. Vice President/Vice President/Director. Data for the middle market segment were weighted where necessary to bring them in line with the population of interest as based on the 2015 CIT Topline by Revenue Client Report, for the following variables: Gender, Title, Revenue, Industry, Percentage of Employees based in the US, Region of Headquarters, and Company Ownership structure.
Founded in 1908, CIT (NYSE:CIT) is a financial holding company with more than $65 billion in assets. Its principal bank subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has more than $30 billion of deposits and more than $40 billion of assets. It provides financing, leasing and advisory services principally to middle market companies across a wide variety of industries primarily in North America, and equipment financing and leasing solutions to the transportation sector. It also offers products and services to consumers through its Internet bank franchise and a network of retail branches in Southern California, operating as OneWest Bank, a division of CIT Bank, N.A. cit.com