Valley National Bank, a subsidiary of Valley National Bancorp, released findings from its second annual Middle-Market C&I Survey: Entering 2026 With Momentum. The survey of 500 commercial businesses across Valley’s footprint reveals that middle-market commercial and industrial (C&I) businesses reported strong 2025 financial performance but face mounting external and operating pressures heading into the new year. 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 to 2025, respondents reported significant gains:
- 92% rate their cash flow as good or very good, up from 79%.
- Productivity rose from 85% to 95%, as more companies reported operating more efficiently across their core functions.
- Profitability climbed from 79% to 89%, reflecting improved financial results across the middle market segment.
These improvements signal that many businesses are stable and are in solid position to weather any challenges. 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,” Gino Martocci, president of commercial banking at Valley Bank, said. “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.”
Successful execution requires focus and the 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
- Pricing strategy and cost efficiencies
While ambition is high, execution gaps remain. Only:
- 40% report effective cash-flow management
- 39% are confident in budgeting and forecasting
- 37% feel effective in cost control
- 36% report strong profit-margin management
- 35% are successfully integrating financial technology
- 30% believe they are optimizing working capital
In addition, 30% say hiring remains difficult and 17% report challenges retaining top employees.
The survey also revealed that only 39% of respondents use fraud mitigation services, despite 68% acknowledging a need for stronger fraud protection. Just 57% included 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.”
Not leveraging an advisory relationship with a banker is another missed opportunity for businesses. Only 22% of respondents use their banker as a trusted advisor for major financial decisions. A strong relationship can help improve working capital management and provide insight into payment flows and risk exposure.
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.
