Middle market companies are leading job growth, employing more than 50 million people and making a contribution of nearly $6.2 trillion to the U.S. economy, according to the inaugural Middle Market Power Index from American Express and Dun & Bradstreet. Using Dun & Bradstreet’s proprietary databases of commercially active U.S. firms, the report analyzes the characteristics and economic impact of middle market enterprises—defined as businesses generating between $10 million and $1 billion in revenues.
The report analyzes the state of middle market companies and finds that while these companies comprise less than 1% of U.S. businesses, they make an outsized economic contribution across industries. Slightly more than one in five dollars (21%) of U.S. business revenues come from the middle market, and these firms employ over one in four workers (28%) in the private sector. Middle market companies have led job growth since 2008, with a 4.4% increase in private sector employment—outperforming both smaller businesses (less than $10 million in revenues) and the largest companies (more than $1 billion in revenues). While small firms employ the largest share of the country’s workforce, the report finds the middle market created 2.1 million (92%) of the nearly 2.3 million net new jobs added during the past seven years. While the majority of large firms are publicly-traded (57%), nearly 98% of middle market enterprises are privately-owned. On average, middle market businesses employ 368 workers and generate $45.1 million per firm per year, compared to 23,226 employees and $7.7 billion among larger enterprises and an average of 4 employees and nearly $276,000 among small companies.
The report also finds that middle market firms operate in all industries, with the largest concentration in the service sector (34%). Within the service sector, business services (12%) lead among middle market companies, followed by educational services (8%) and health services (7%). Looking beyond the service sector, the data finds the next largest industries for middle market firms are wholesale or retail trade (25%), manufacturing (17%), and construction (8%). Compared to small or large enterprises, more middle market firms are concentrated in wholesale trade. Among commercially active firms in the U.S., 7% are identified as majority women-owned while 2% are majority minority-owned. Women own 7% of commercially-active, privately-owned small businesses, 6% of middle market companies, and just 1% of large enterprises. Additionally, 2% of commercially-active small businesses are minority-owned, as are 5% of middle market companies and 1% of large firms. The Middle Market Power Index report is based on an analysis of all of the firms in Dun & Bradstreet’s commercial databases of nearly 19 million (18,950,877) businesses between 2008 and 2014 the first a virtual census of all of the commercially active businesses in the United States; the second 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 are reported. Additionally, public sector entities are excluded.