Percentage of mid-market firms expecting higher profits by country
![Column chart showing the percentage of middle market firms by country that expect to generate higher profit growth over the next 12 months. U.S. middle market firms lead the way, with 70% of companies expecting higher profits compared a global average of 59%. Just 45% of firms in the European Union expect higher profits over the next 12 months compared to 56% of Asian Pacific firms, 58% of firms in the EMEA region and 63% of Latin American firms.](https://fsinvestments.com/wp-content/uploads/2024/07/COTW_2024-07-12_blog-730px.jpg?w=1170)
Source: Grant Thornton International Business Report, as of April 30, 2024, latest data available. EMEA refers to Europe, Middle East and Africa.
- The U.S. middle market has emerged as an unsung hero for many investors, offering the potential for diversification and growth within a market that otherwise appears to present fewer opportunities for either, despite today’s ebullient backdrop.
- Investing in the S&P 500, for example, increasingly implies a bet on a small group of large cap U.S. tech and tech-related firms—the Mag 7—as market breadth has narrowed significantly. Meanwhile, approximately 41% of small and mid-cap companies within in the Russell 2000 Index generate negative earnings today, up from 25% in 2012.1
- According to Grant Thorton’s global survey of mid-market companies, U.S. businesses are more optimistic on the near-term outlook than their global peers. In fact, 70% of U.S. middle market firms expect to grow their profits over the next year compared to just 45% such firms in the European Union.2
- Investors looking for reliable sources of growth and diversification face challenges due to recent fundamental changes in financial markets and the global economy. The private U.S. middle market may serve as a diversified source of growth within investors’ portfolios.