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Deloitte Survey: Mid-Market forging ahead with investments that spur growth

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Deloitte Survey: Mid-Market forging ahead with investments that spur growth

Hiring, technology investments and capital spending on the rise

Mid-market executives are accelerating strategic business investments and displaying increased optimism, despite a harsh winter that took a toll on growth for U.S. businesses, according to the findings of  a survey recently released by professional services firm Deloitte.

As the economy shows signs of strength again, mid-market executives report more confidence in growth prospects. In fact, 39% of the executives believe the economy will grow 2% to 3.5% over the next 12 months, compared to 23% a year ago. Their optimism also extends to their outlook on the job market, as the majority believes that the unemployment rate will either go down or remain the same during the next 12 months. As such, significantly fewer respondents (41 percent) say the uncertain economic outlook is an obstacle to their company's growth, compared to a year ago (59%).

"Our survey results show that mid-market executives are regaining the confidence to increase their investing for growth once again."

Moreover, the positive outlook of mid-market executives is translating to increases in capital investments. A higher number of mid-market executives (38%) report they are increasing capital investments, compared to last year (32%), and only 23% of respondents say that their company is deferring major investments due to uncertainty, down from 43% a year ago.

"The economic ups and downs since the Great Recession caused many mid-market executives to postpone strategic decisions and scale back investments," said Tom McGee, deputy chief executive officer, Deloitte LLP. "But over the past year, we've seen that hesitancy begin to shift. Our survey results show that mid-market executives are regaining the confidence to increase their investing for growth once again."

Strategic Investments Accelerating

Flush with cash and buoyed with historically low interest rates, mid-market executives are investing in hiring and technology in an effort to promote growth.

  • Forty-three percent of respondents say they plan to increase full-time headcount in the next 12 months
  • Forty-eight percent rank technology investments as one of their top three investment priorities
  • Forty-five percent say development of new products  and services is one of their top two investment priorities over the next 12 months

Strategies for Growth
In order to spur growth, mid-market executives are increasingly looking to drive sales by expanding in existing markets and diversifying their customer base. In fact, sales remain the highest priority for mid-market executives both in terms of capital (25%) and time (42%) investments for the coming year.

When it comes to their top business strategy for the next 12 months, growing organically within existing markets was cited most among executives (24%), followed by raising new capital (12%) and reducing costs/improving margins (10%).

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