A recent survey from the National Center for the Middle Market (NCMM), reveals that middle market firms are continuing to report sustained growth despite ongoing macroeconomic pressures.
According to NCMM's 2022 Mid-Year Middle Market Indicator, despite the 11 percentage-point drop in global economic confidence compared to six months ago (64 percent in the second quarter of 2022 vs. 75 percent in the fourth quarter of 2021), nearly four out of five (79 percent) middle market firms are reporting revenue growth from a year ago, and more than half (58 percent) continuing to add to their workforce – even in a tight labor market.
"Middle market companies are experiencing sustained recovery, posting record revenue increases and hiring more workers to meet unprecedented consumer demand," said Ben Rockwell, Division President, Chubb Middle Market. "As economic factors impact the cost of risk, the collaboration between middle market firms and their insurance agents and brokers is more important than ever in developing robust risk mitigation strategies and identifying potential coverage gaps to help minimize exposures which could inhibit future growth."
According to survey results, inflation has emerged as a major concern for middle market companies. Of the 39 percent of firms reporting that inflation has negatively impacted their company, 62 percent say they have raised their prices or rates in response. Additionally, middle market firms are keenly aware of how the cost of risk has increased, with three out of four (75 percent) firms recognizing that the replacement cost of covered assets has increased – highlighting the importance of accurate valuations and strong business continuity plans.
Supply chain challenges continue to be a significant hurdle, with 55 percent of middle market companies reporting that they have been directly impacted by supply chain disruptions, up from 47 percent in the fourth quarter of 2021. Of the middle market firms that have been impacted by supply chain delays, 86 percent report a negative impact on current revenue, and 85 percent report a negative impact on revenue projections for the remainder of 2022.
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