A new report from Barlow Research shows that, post the 35-day recent government shutdown that ended on January 25, small businesses remain confident in the U.S economy, while confidence by middle-market companies has declined, reaching a two-year low. The research, titled “1st Quarter 2019 Economic Pulse Report,” analyzes business confidence, credit appetite, and outlook on the next 12 months in business.
Small businesses, companies that make between $100,000 and $10 million in annual sales revenue, have seen sales and profits decline over the last 12 months, though they have remained confident that sales expectations will reach their highest point since the great recession about a decade ago. However, middle market companies, which make between $10 million and $500 million in annual sales revenue, have seen stable profits and sales over the last year, yet remain apprehensive about the next 12 months.
Middle market companies also expect to see another recession in 2019 or 2020. Both small and middle market companies are not expecting to increase their need for bank loans, following a trend for decreasing bank loans, despite applications for additional credit rebounding from lows seen at the end of 2018.
“The disparity between small business and middle market perceptions of the economy is growing. It’s encouraging to see positivity in the small business market, but unfortunately, middle market metrics tend to have a bit more validity when it comes to what to expect in the near future. In the meantime, financial institutions shouldn’t anticipate substantial loan growth from either market” said John Barlow, President of Barlow Research in a press statement.
