CIT Voice of the Middle Market: Perspectives from the Heart of America’s Economy
NEW YORK--(BUSINESS WIRE)--While economic uncertainty at the national level is a top concern among middle market executives, many still believe that their companies are on solid ground. More than half (53%) say that their companies are stronger today than before the Great Recession, according to the “CIT Voice of the Middle Market: Perspectives from the Heart of America’s Economy” (cit.com/middlemarketoutlook) survey released today by CIT Group Inc. (NYSE: CIT) cit.com, a leading provider of financing to small businesses and middle market companies. The majority of middle market executives also report that, during the next 12 months, their companies are likely to: increase the range of products and services they offer in current markets (65%); expand into adjacent markets (58%); and enter other geographic regions (54%). In addition, about 4 in 10 middle-market leaders (42%) also expect to expand their workforce in the coming year.
“Middle market companies have long been the backbone of the U.S. economy, employing tens of millions of Americans and generating trillions in revenue annually,” said John A. Thain, Chairman and Chief Executive Officer. “At CIT, we recognize the importance of these companies and have been dedicated to providing lending, leasing, and advisory services to the middle market for more than 100 years. This research is another extension of our commitment to this critical group of companies, exploring their views and perspectives on important issues affecting them today.”
According to the research, a vast majority of middle market executives agree that middle market companies are: job creators (97%), barometers of the U.S. economy (95%), and drivers of innovation (91%).
The online survey was conducted by KRC Research among 300 U.S. middle market executives who represented a range of industries. In order to be eligible to participate in the survey, respondents had to be in a leadership role at a firm whose revenue was between $25 million and $1 billion and a majority of whose employees were based in the United States. Dr. Arnoldo Hax, Alfred P. Sloan Professor of Management Emeritus and a Professor of Technological Innovation, Entrepreneurship, and Strategic Management at the MIT Sloan School of Management, provided guidance and insights throughout the research process.
“Although they might often be overlooked for more blue chip companies, the middle market is a critical component of the U.S. economy today,” said Dr. Hax. “The factors that are explored in this research study are of great centrality for every company, but they are particularly critical for the middle market, given the imperative that relies upon them to achieve success.”
Other Key Findings
- Financing an Area of Satisfaction. Overall satisfaction with financing proves high. Eight in ten middle market executives (81%) report that they are satisfied with their company’s access to financing, as well as the cost of financing for their company. Most also say that they are satisfied with the variety of financing alternatives available to their company (79%).
- Impact of the Presidential Election. Not surprisingly, the vast majority of middle market executives (81%) say that the outcome of the presidential election will have an impact on the health of the economy; 38 percent say it will have a major impact. However, 71 percent say that the presidential candidates spend too little time talking about the middle market.
- Federal Regulation a Concern, along with Economic Uncertainty and Talent Management. Looking ahead to the next 12 months, middle market executives express concern about continued economic uncertainty at the national level (83%) and talent management—the ability to retain top talent (59%) and to hire top talent (55%). Additionally, more than half (56%) are concerned about compliance with federal regulations, and healthcare reform tops the list of existing or pending federal legislation or regulation with the greatest impact on their companies.
- Room for Improvement in Strategic Management. Many middle market companies seem to fall short on their strategic management capacity. Based on the findings of the study and questions about company strategy, organization structure, effectiveness of business units, measuring and rewarding performance, and organizational culture, researchers developed an index to rate the management capacity of middle market companies. According to this index, only 26 percent of middle market executives represent companies that have strong strategic management. In fact, just one third (33%) of executives surveyed say that their company has in place a clear strategy that was reached by a consensus of key executives, that has been communicated, and that addresses short- and long-term implications. Almost one in four (24%) say that their company’s strategy has not been communicated or that their company has no clear strategy in place.
Additional information about the study, “CIT Voice of the Middle Market: Perspectives from the Heart of America’s Economy,” including the full whitepaper, an infographic, and related materials, can be found at cit.com/middlemarketoutlook.
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About the Survey
KRC Research, on behalf of CIT, fielded an online survey among 300 U.S. middle market executives representing a range of industries. Researchers conducted fieldwork in the summer of 2012. In order to be eligible to participate in the survey, respondents had to be in a leadership role at firms with revenues between $25 million and $1 billion, the majority of whose employees were based in the United States. Researchers defined leadership roles as: Owner, Board Member, C-Suite Executive (Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Information Officer, Chief Investment Officer, or other C-Suite title), or SVP/VP/Director.
Founded in 1908, CIT (NYSE: CIT) is a bank holding company with more than $33 billion in financing and leasing assets. A member of the Fortune 500, it provides financing and leasing capital to its small business and middle market clients and their customers across more than 30 industries. CIT maintains leadership positions in small business and middle market lending,factoring, retail finance, aerospace, equipment and rail leasing, and global vendor finance. CIT also operates CIT Bank (Member FDIC), BankOnCIT.com, its primary bank subsidiary, which offers a suite of savings options designed to help customers achieve a range of financial goals. cit.com