Middle-market commercial and industrial businesses reported strong 2025 financial performance but face increasing external and operating pressures heading into the new year, according to findings from Valley National Bank’s second annual Middle-Market C&I Survey: Entering 2026 With Momentum.
The bank surveyed 500 commercial businesses across its footprint to reach its conclusions about the challenges its clients face. While remaining optimistic about 2026, businesses are adapting to evolving dynamics such as cash‑flow timing, cost pressures and a more uncertain global environment.
Compared with 2025, respondents reported significant gains: 92% rate their cash flow as good or very good, up from 79%. Productivity rose to 95% from 85%, as more companies reported operating more efficiently across their core functions. Profitability climbed to 89% from 79%, reflecting improved financial results across the middle‑market segment. Middle market banking is the segment that provides investment banking services to companies with revenue in the range of $50 million to $1 billion.
However, difficulty managing inflation and interest rates rose to 57% (up from 45%), while 52% expressed concerns about geopolitical tensions and trade policies (up from 41%).
Middle-market businesses help drive the U.S. economy and the positive results in this survey indicate that many are entering 2026 in strong and stable positions,” said Gino Martocci, president of commercial banking, Valley Bank. “To maintain this momentum, leaders should focus on the basics, be selective in what they prioritize and those who focus on a few core areas and remain vigilant and adaptable, will achieve greater success in an evolving landscape.”
Survey respondents identified six priorities that will comprise their core initiatives for 2026: Financial and operational efficiency; customer retention and loyalty; pricing strategy and cost efficiency; AI and machine learning adoption; data analytics and business intelligence; and pricing strategy and cost efficiencies.
The survey was conducted in December 2025 with 500 middle-market business financial decision makers. To qualify, respondents had to be responsible for or play a leading role in financial decisions at a U.S. company with annual revenue between $5 million and $249 million.
