America's medium-sized companies show 'measured optimism' for 2026 following a buoyant 2025, according to a JPMorgan poll

US Midsize Businesses Show Waning Optimism for 2026 Economy

Confidence in the American economy among midsize companies has cooled, according to a recent survey by JPMorgan Chase.

The report, published Wednesday, reveals that only 39% of executives at midsize US businesses feel positive about the national economic outlook for 2026—a significant drop from 65% the previous year, when optimism reached its highest point in five years.

Melissa Smith, who leads commercial banking at JPMorgan Chase, described the current mood as "cautious optimism."

“There’s a general sense of satisfaction with the underlying economic fundamentals,” Smith explained in an interview. “However, ongoing geopolitical uncertainties continue to weigh heavily on decision-makers.”

Stronger Confidence in Individual Companies

Despite concerns about the broader economy, leaders remain more upbeat about their own organizations. Among the more than 1,400 surveyed, 51% expressed optimism about their industry’s prospects—a decrease from 60% last year. Meanwhile, 71% are confident in their own company’s future, a figure that has remained relatively steady compared to 74% the previous year.

Expectations for sales, profits, and hiring have softened slightly but remain robust. About 73% anticipate higher revenues in 2026, 64% foresee increased earnings, and 48% plan to add staff. These numbers are only marginally lower than last year’s responses, which stood at 74%, 65%, and 51%, respectively.

The Middle Market’s Economic Significance

Midsize companies, defined by JPMorgan as those generating between $20 million and $500 million in annual revenue, play a crucial role in the US economy. They account for roughly one-third of all private-sector revenue and employment, making their outlook a key indicator for the nation’s economic health.

Exterior of JPMorgan Chase headquarters, November 13, 2025, New York City. (Angela Weiss/AFP via Getty Images)

These firms are not only vital clients for US banks and private credit funds, but also serve as a primary source of acquisitions and exits for private equity, as well as business for M&A advisors.

Shifting Growth Strategies

As overall economic optimism dims, many midsize companies are doubling down on alternative growth strategies. The proportion of leaders planning mergers or acquisitions as part of their 12-month growth agenda has climbed to 39% for 2026, up from 31% the previous year.

While last year’s dealmaking was marked by a surge in transactions exceeding $10 billion , both M&A professionals and private equity investors are hoping for a rebound in smaller deals in the coming year.

“We’re observing founders, executives, and investors seeking strategic alliances, exploring mergers and acquisitions, and finding innovative ways to position their businesses for future success,” Smith noted.

Credit Concerns and Financial Health

Worries about credit conditions among midsize businesses intensified in the latter half of last year, especially following the collapse of subprime auto lender Tricolor, to which JPMorgan had $170 million in wholesale lending exposure .

Despite these concerns, most US banks and financial institutions downplayed the risks through the end of the fourth quarter. Smith emphasized that midsize firms are entering 2026 with relatively strong balance sheets. With plans to keep hiring at moderate levels, many companies are well-positioned to become attractive acquisition targets in the year ahead.

“At this stage, we’re not witnessing any significant decline in credit quality,” Smith said. “In fact, most companies’ financial positions are quite solid as we approach 2026.”

David Hollerith reports on the financial industry, covering everything from major national banks to regional lenders, private equity, and the cryptocurrency sector.