Middle market trend watch: Inventory data and holiday spending


Authored by RSM US LLP

A modest improvement in economic activity following the gradual reopening of the economy gave a boost to middle market business sentiment. The RSM US Middle Market Business Index improved to 128.0 in September from 124.9 in August.

Inventory management, as one would expect following a severe shock to the economy, remains paramount to the middle market. In this time of positive sentiment, are businesses stocking up inventories or scaling down? As noted in the MMBI report:

The takeaway

Since early fall signals when middle market firms begin to build up inventories in anticipation of holiday-induced demand, this somewhat cautious outlook on inventories in September implies expectations for a possible weak holiday spending season. While overall sentiment is improving, middle market businesses remain carefully restrained in some areas of operations. Organizations may look to bridge business challenges with process efficiencies and technology solutions, especially when it comes to optimal inventory management.