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Mid-market executives signal a slowdown in spending

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Mid-market executives signal a slowdown in spending

Mid-market companies are dialing back in some areas, despite economy gaining momentum in US.

While the U.S. economy is growing at a more rapid rate, mid-market momentum has slowed to a more modest pace than seen in recent years, according to a report from professional services firm Deloitte. This trend may be due to the belief that the economy will not grow in excess of 2% over the next 12 months; a view held by 29% of mid-market executives – the highest mark since spring 2014.

"On our five-year anniversary surveying 500-plus executives in this important market segment, our data shows mid-market executives reining in certain expenditures," said Roger Nanney, vice chairman, Deloitte LLP, and national managing partner of Deloitte Growth Enterprise Services. "The reason may be due to a focus on short-term economic fluctuations. We are encouraging mid-market executives to take a long-term view to business growth and success."

Mid-market executives point to several growth barriers and threats to their business:

Cost of health care takes center stage
In the latest survey, more than half of executives (53%) cite rising health care costs as the No. 1 obstacle to US growth, and more than one-third (34%) refer to it as the No. 2 issue for company growth, behind the uncertain economic outlook. Following passage of the Affordable Care Act in 2010, mid-market concerns regarding health care costs had been steadily waning. Now, nearly one-third of respondents (32%, up from 26% one year ago) favor rolling back health care reform as a way the government could aid growth.

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