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RSM Launches Mid-Market Economic Business Index

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The national accounting firm RSM US LLP (RSM) has released the first RSM Middle Market Business Index (MMBI). Developed in partnership with Moody’s Analytics, the index is designed to reflect business conditions in the U.S. middle market, while providing a statistically significant measure of the health and outlook for these businesses.

RSM provides audit, tax and consulting services to the middle market. Going forward, the consultancy says the index will serve as a leading indicator for the middle market (the real economy), a vital segment of the U.S. economy that represents more than 200,000 firms, 40 million jobs and one-third of private sector gross receipts.

“Until now, there has been no comprehensive index for the middle market, which is astounding, given the critical role it plays in producing the goods and services that fuel the U.S. economy,” said Joe Adams, managing partner and chief executive officer for RSM US LLP. “Our investment in the RSM Middle Market Business Index reflects our steadfast commitment to the middle market and our belief that a deeper understanding of these businesses by policymakers and the broader business community will lead to positive outcomes for the entire economy.”

The inaugural edition of the index puts U.S. middle market business conditions at 116.6 in the first quarter of 2016, a 1.4 percent uptick from the fourth quarter of 2015:

The MMBI is a culmination of more than five quarters of primary research and analysis via RSM’s Middle Market Leadership Council, quarterly surveys of a panel of 700 middle market executives managed by Nielsen. The MMBI is based on a subset of 20 questions from these surveys that are aimed at measuring changes in key performance indicators such as revenues, profits, capital expenditures, hiring, employee compensation, prices received, prices paid and inventories, as well as questions on general economic sentiment and corporate financing. Since RSM began surveying the middle market to develop the MMBI in Q2 2015, the index has shown promise that it can become a leading indicator for hiring, revenues and productivity once more time series data is collected.

“The RSM Middle Market Business Index provides a critical and never-before-seen view into the past, present and future of the Real Economy,” said Joe Brusuelas chief economist for RSM. “We’re seeing a market segment that’s optimistic about the direction of the real economy and a more confident U.S. consumer. What’s more, MMBI data and other research indicate that the major U.S equity indices are no longer indicative of real economic activity in the U.S.”  

RSM plans to publish updated MMBI data on a quarterly basis and use the data and insights from each report to help consult and advise middle market executives on a range of important business issues and growth initiatives. For more information on the MMBI, visit RSM’s website. A comprehensive report on other business issues about which RSM has queried the panel over the last five quarters is forthcoming in April.