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).
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-active1 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.
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.
Middle market companies make up an average of 0.7% of U.S. companies. There are seven states in which middle market firms comprise a greater than average (0.9% or more) share of companies:
1. Illinois (1.1%)
2. Wisconsin (1.1%)
3. Massachusetts (1.0%)
4. Michigan (1.0%)
5. New Jersey (1.0%)
6. New York (1.0%)
7. Ohio (0.9%)
In addition to these seven states, higher than average percentages of middle market firms exist in Washington, D.C. (1.8%), Puerto Rico (5.1%), and the U.S. Virgin Islands (3.9%).
According to the report, there are three states in which middle market companies make up less than one-half of one percent of firms in the state:
1. Florida (0.36%)
2. Louisiana (0.44%)
3. Colorado (0.48%)
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.
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