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RSM US Middle Market Business Index Update

The latest data from the RSM US Middle Market Business Index (MMBI) shows a notable increase to 131.5 in the fourth quarter, up from 123.3 in the previous period. This index, released by RSM US LLP in collaboration with the U.S. Chamber of Commerce, points to a period of rising revenues and profits among middle market firms, despite a generally cautious view of the economy.

Overview of the MMBI Increase

The increase in the MMBI reflects a moderate acceleration in economic conditions as firms adapt to shifts in regulation, tax reforms, and favorable interest rates. The survey data indicates that over half of the respondents saw an uptick in both revenues and net earnings, with 52% reporting increased revenues, and another 58% predicting further growth within the coming six months.

Joe Brusuelas, the chief economist at RSM US LLP, highlighted that 2025 has been marked by significant policy changes, particularly in trade and immigration. Despite ongoing inflation, the positive uptick in the index suggests an acceleration as the year ends. Brusuelas noted, "Growth continues even as inflation persists, and retroactive full expensing should support further investment in the middle market."

Economic Sentiment and Pricing Pressures

While optimism surrounding revenue and earnings growth is evident, executive sentiment towards the overall economy remains tempered. Only 38% of respondents feel that the economy improved, while 36% have noted a decline. Looking forward, 46% expect improvement in the next six months, but 32% anticipate a weakening economic environment.

The anxiety among executives regarding pricing pressures is also noteworthy. With inflation rates hovering around 3.6%, 71% of respondents reported an increase in costs. As a result, 61% stated they would need to pass these costs on to customers, and 64% indicated plans to raise prices in the near future. Neil Bradley, from the U.S. Chamber of Commerce, pointed out that while profit margins may improve by passing costs to customers, inflationary pressures remain a significant concern.

Labor Demand Trends

The survey revealed cooling demand for labor within the middle market. Only 40% of firms increased hiring during the quarter, and 50% signaled intentions to do so in the coming months. Although 50% reported raising wages to attract talent, the labor market remains tight, which could pose challenges to growth.

Capital Expenditure Insights

On a more positive note, the survey indicates a slight rebound in capital expenditures. Improved revenue and earnings expectations, coupled with policies permitting retroactive full expensing, have pushed 48% of firms to increase their capital outlays in the current quarter, and 53% foresee further increases in the next half of the year.

The insights presented in the MMBI are derived from a survey conducted with 405 middle market executives in the U.S. between October 1 and October 22, 2025, underscoring the changing dynamics within this critical segment of the economy.
For more information on the MMBI, including detailed survey methodology and results, check RSM’s partnership with the U.S. Chamber of Commerce.

Conclusion

In conclusion, while the MMBI shows a rise in optimism amid increasing revenues and profit margins, caution prevails regarding the general economic landscape and the pressures of inflation. As the middle market looks to the upcoming year, the focus will likely shift to leveraging improved policies and managing costs effectively to sustain this positive momentum.