RSM US Middle Market Business Index Reaches New Heights as Firms Ramp Up Investments

RSM US Middle Market Business Index Reaches New Heights

In a significant upward movement, the RSM US Middle Market Business Index (MMBI) has soared to 113.4 in the second quarter of 2026, rising from 107 in the previous quarter. This benchmark reflects a peak in the current business cycle, attributed to favorable factors such as tax cuts, increasing equity valuations, and a positive outlook for revenues, earnings, and capital investments.

The latest survey reveals that the middle market is enjoying a broad-based improvement in core fundamentals. A standout feature of this surge is the substantial investment in non-residential ventures, particularly driven by a staggering $1.6 trillion allocated for capital expenditures related to artificial intelligence (AI). This surge in investments has provided a much-needed boost to the overall economy, counterbalancing weaknesses seen in other sectors such as housing.

Optimism in the Middle Market

Joe Brusuelas, the chief economist of RSM US LLP, commented on this growth, stating, "America's middle market is firing on nearly all cylinders at the midpoint of 2026." He emphasized the willingness of middle market enterprises to continue investing and hiring, which highlights their essential role as a stabilizing force amid ongoing inflation challenges and geopolitical uncertainties.

In terms of mid-year confidence, the survey depicts strong fundamentals. A notable 59% of middle market executives reported an increase in revenues, while 58% noted growth in net earnings. Looking ahead, 66% anticipate revenue growth, and 65% expect to see higher earnings in the upcoming six months.

The current quarter has seen heightened momentum toward capital expenditures. A remarkable 57% of the respondents indicated increased spending, with 65% foreseeing further acceleration in investments within the next half-year, which Brusuelas believes bodes well for productivity and general economic health.

Inflation: A Temporary Concern?

Despite the positive indicators, inflation remains a topic of concern. 78% of respondents reported facing higher prices compared to 71% in the prior quarter. However, the expectation of continued price hikes has slightly diminished, with 69% of respondents anticipating such trends, suggesting that many in the middle market perceive inflation as a temporary setback. Still, considerations about potential risks arising from supply shocks due to geopolitical tensions persist.

Employment Trends Reflect Growth

Employment growth aligns closely with these positive economic trends. Middle market executives are keen on expanding their workforce to mirror their optimistic growth predictions. Over 53% noted an uptick in hiring activities in the second quarter, up from 45% previously, while 58% believe hiring will increase in the next six months.

The demand for talent is also evident as 62% of executives indicated that they had raised salaries, a significant increase from 53% beforehand; 65% plan on elevating wages to attract new talent. The survey conducted between April 1 and April 23, 2026, involved 500 respondents from various middle market firms across the United States.

Details of the MMBI Survey

The RSM US Middle Market Business Index is rooted in research conducted by Harris Poll since the first quarter of 2015. It is a quarterly survey that delves into the operations of middle market firms and has transitioned to reflect RSM's updated definition of this market segment. The current panel showcases between 400-500 active respondents who have participated in previous surveys.

An essential aspect of the MMBI lies in its collaborative construction with Moody's Analytics, deriving insights from a set of questions aimed at uncovering changes in key business indicators. Questions tackle various facets of business health, including revenues, profits, capital expenditures, hiring practices, compensation levels, and overall economic conditions. The respondents are tasked with reporting changes compared to the previous quarter and predicting future trends over the next six months.

The index reading, which operates on a scale with a baseline of 100, indicates expansion above this threshold and contraction below it. A reading significantly above 100 signifies a strong expansion phase for the middle market.

Conclusion

As RSM US LLP celebrates a legacy of empowering middle market firms for over a century, its focus continues to be on facilitating growth and providing insightful solutions tailored to the dynamic needs of these enterprises. The latest MMBI results underscore the resilience and optimism pervading the middle market, reinforcing its critical function in America's broader economic landscape. As firms navigate the intricacies of inflation and geopolitical challenges, their commitment to investment and growth remains steadfast, marking a promising outlook for the second half of 2026.