Wisconsin’s strong manufacturing sector plays a vital role in helping middle market firms grow and thrive throughout the state.
The most recent Middle Market Power Index ranked Wisconsin 11th in the nation in the growth of mid-sized companies over the past five years. The number of those firms grew 90.5 percent from 2011 to 2016, per the report released by American Express and Dun & Bradstreet. The latter defines middle market companies as having revenues between $10 million and $1 billion.
The report cites the state’s manufacturing and wholesale trade sectors for the increase.
“Middle market firms are found in every state in the nation, yet – due in no small measure to the industrial heritage of middle market firms – some states are more likely than average to be home to middle market firms,” the report said.
Wisconsin falls into that “more than average” range.
Wisconsin has 4,083 middle market companies, 1.1 percent of the state’s total, higher than the national average of 1 percent.
The report echoes others showing growth in Wisconsin’s manufacturing sector. The U.S. Bureau of Labor Statistics reported the number of people employed in manufacturing grew 1.3 percent from July 2015 to July 2016.
“Wisconsin has a great ecosystem for manufacturing. There are several factors that come into play,” said Tim Wiora, executive director/CEO for the Wisconsin Manufacturing Extension Partnership (WMEP). “Our legislators in Wisconsin know that manufacturing is important, and they have programs in place to help with that. We also have rich talent and a history of innovation that creates a stronger atmosphere for manufacturers.”
In Wisconsin, Wiora said, the state’s large original equipment manufacturers (OEMs), such as GE, Harley-Davidson and Oshkosh Corp. play a critical role in helping state manufacturers grow.
“The OEMs require a rich supply chain, and it’s better for them to have suppliers close by,” he said. “If those companies do the right thing and get connected to an OEM, they can grow into that middle market area.”
Wisconsin’s manufacturing growth can also be tied to its location, Wiora said.
“We are close to two very large population areas (Chicago and the Twin Cities) and we are right on the Great Lakes, which provides our companies with easy shipping access. That access plays a valuable role in growing exports,” he said.
“Since 95 percent of a company’s future (potential) customers lie outside the United States, exporting is important when talking about taking your business to the next level.”
While manufacturers make up the largest segment of Wisconsin’s middle market businesses, Jeff Stibel, Dun & Bradstreet’s vice chairman, said the report found some interesting, if not surprising, trends regarding the manufacturers’ age and product lines. Companies who have been around less than 10 years were more likely to make electronic equipment or components or chemical products, while businesses who have been around for more than 50 years tend to produce fabricated metal products.
“The shift in types of products being manufactured suggests how demand for certain goods has changed over time,” he said.
Nationwide, middle market companies are leading economic growth, with mid-sized businesses creating 53 percent of all new jobs since 2011. That outpaces growth by both small and large-sized firms, Stibel said. Middle market companies comprise only one percent of U.S. businesses but employ 27 percent of private sector workers.
By the Numbers
According to the Middle Market Power Index, Wisconsin has:
businesses with revenues less than $10 million
businesses with revenues between $10 million and $1 billion
businesses with more than $1 billion in revenue