The RSM US Middle Market Business Index tumbled to 124.1 from 132 in the first quarter. Declines in current conditions, expected outlook for the economy and capital expenditures should be interpreted by policymakers as a signal that the “uncertainty tax” generated by the direction of U.S. trade policy and recent volatility in financial markets has spilled over into the real economy, writes RSM US Chief Economist Joseph Brusuelas.
Despite the souring economic outlook and modest deterioration in revenues and profits during the current quarter, middle market businesses expect improvement in the next six months, with 62 percent of those polled expecting revenues to increase and 60 percent anticipating a rise in net earnings.
In this short video, Brusuelas explains what’s behind the index decline. Read more about the first quarter MMBI reading and download the full report here.