Nearly two-thirds (64%) of middle market
companies continue to indicate they have plans to allocate money toward
investment at some point during the next 12 months. This percentage is up
slightly from 63% during the same time a year ago and has remained consistent
And what kind of expenditures do these
companies have in mind? Plants and equipment appears to be the dominant choice,
as 34% of all middle market companies and 47% of the biggest middle market
companies have shown a strong likelihood of adding a new plant or facility at
some point during the coming year.
Plant and equipment expenditures also
appears to be on the minds of those companies that are wishing to hold onto
their cash for now. Of the approximately one-third of companies that plan to
save cash, 17% say they will hold it for future plant-and-equipment-related
A high level of confidence in the
economy is behind these projected capital expenditures. According to the
report, revenue grew by 9.2% during the past 12 months for middle market
companies nationally. And that growth is expected to hit 8.8% during the next
12 months. Overall, 59% of middle market companies are projecting revenue
growth, compared to 52% during the first quarter of 2016.
“The U.S. middle market closed 2016 on a
high note and has carried that momentum forward into 2017, with all indices
pointing to an increasingly robust middle market,” the report reads. “Actual
and projected revenue and employment growth rates continue to rise
significantly, and economic confidence is keeping pace, with all measures at
their highest levels since the inception of the Middle Market Indicator in
advantage of economic growth
With such a rosy outlook anticipated,
now might be a good time to take a step back and consider where investment
dollars might make the most sense during any expansion projects a company
entertains. For example, instead of taking a short cut today and skimping on
costs, companies might want to consider factoring projects into the new
expansion that help long-term benefits of energy efficiency.
The Electric Power Research Institute
(EPRI) estimates there will be up to 605 billion kWh in unrealized energy
efficiency savings between 2016 and 2035. With 19% of office buildings
consuming 17% of U.S. energy, there is a great opportunity here to install
systems that could help companies lower their exposure to energy costs.
There are many efficiency opportunities
in both existing and new construction buildings. In existing buildings, these
opportunities come in the form of equipment upgrades, improved building and
energy management systems, commissioning, and improved operations and
maintenance. Meantime in new construction, opportunities include advanced design
and technologies as an important means of saving energy.
The Greater Cleveland Partnership’s
Energy Team can help you identify the energy projects that make the most sense
for your business. You can contact the team via email at email@example.com or by calling (216) 592-2205.