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The Blueprint:
- Valley Bank‘s 2025 survey included 500 financial decision-makers from U.S. middle-market firms, including on Long Island.
- 92% rated their cash flow as good or very good in 2025, up from 79% the previous year.
- Concerns about inflation, interest rates and geopolitical tensions increased among middle-market firms.
- Only 22% of firms use their banker as a trusted advisor for major financial decisions.
Middle-market commercial and industrial businesses saw strong financial performance in 2025, but now face rising cost pressures and global uncertainty.
That’s according to Valley Bank’s second annual middle-market commercial and industrial survey, “Entering 2026 with Momentum.”
Looking ahead, businesses remain optimistic but are adjusting to shifting dynamics, including cash‑flow timing, rising costs and an increasingly uncertain global landscape.
“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,” Gino Martocci, president of Commercial Banking of Valley Bank, said in a news release about the survey.
“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,” Martocci said.
Conducted in December, the survey included 500 financial decision-makers at U.S. middle-market companies across Valley Bank’s footprint, including Long Island. Eligible participants were responsible for or played a leading role in financial decisions at firms with annual revenues between $5 million and $249 million.
Compared to 2025, respondents reported significant gains. Ninety-two percent rated their cash flow as good or very good, up from 79 percent the previous year. Productivity rose from 85 percent to 95 percent, as more companies reported operating more efficiently across their core functions. Profitability also climbed, increasing from 79 percent to 89 percent, reflecting improved financial results across the middle-market segment.
Still, concerns about difficulty managing inflation and interest rates rose to 57 percent, up from 45 percent, while 52 percent say they were concerned about geopolitical tensions and trade policies, up from 41 percent a year ago.
Survey respondents identified priorities that will drive their key initiatives for 2026. These include financial and operational efficiency, alongside efforts to enhance customer retention and loyalty. Strengthening pricing strategy and cost efficiency was also highlighted. Additionally, organizations plan to invest in AI and machine learning adoption. Data analytics and business intelligence were recognized as critical tools.
Yet there may be shortcomings in carrying out these initiatives, according to the survey. Only 40 percent of respondents report effective cash-flow management, and 39 percent express confidence in their budgeting and forecasting processes. Just 37 percent feel they are effective in controlling costs, while 36 percent report strong profit-margin management. Meanwhile, 35 percent indicate they are successfully integrating financial technology, and 30 percent believe they are optimizing working capital.
In addition, 30 percent say hiring remains difficult, and 17 percent report challenges in retaining top employees.
The survey also showed that only 22 percent say they use their banker as a trusted advisor for major financial decisions.
It also found that 39 percent implement fraud mitigation services, even though 68 percent recognize the need for stronger fraud protection. Additionally, just 57 percent rank data security among their top priorities.
“Fraud protection is not optional, it is foundational,” Martocci said. “Simple safeguards, real-time alerts, and clearly defined response protocols can dramatically reduce financial loss and business disruption.”
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Adina Genn
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