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RSM Index Finds Start of Rebound

RSM US says its analysis of the middle market finds that the businesses in that sector showed improvement in May, after sinking to a historical low in April. RSM said that conclusion stems from its reading of the RSM US Middle Market Business Index (MMBI).

 

The MMBI  composite score jumped to 106.1 in May after dropping to a low of 87.8 in April. The firm said the numbers indicate “the tentative beginning of the long road to recovery in the U.S. economy.” 

RSM said it will continue to publish monthly installments of the index during the pandemic. The May 2020 MMBI data was collected between May 14 and May 28.

RSM said the uptick was probably driven by the reopening of the  economy in several states. Middle market leaders generally expect a quick return to modest growth this year.

Fifty-three percent of middle market executives surveyed expect the economy to improve over the next few months with 50 percent anticipating an improvement in gross revenue and 49 percent forecasting an increase in net earnings. That is a significant improvement from 28 percent expecting improved in revenue and 29 percent in net earnings.

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Despite the optimism “decreased current and expected capital expenditures on productivity could lead to long-term damage,” RSM found. Only 27 percent of leaders said it is a good time for increasing capital outlays and only 39 percent said they will boost capital spending in the next six months.

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