KeyBank in Cleveland, which has 15 branches in Michigan, has released the results of its Middle Market Sentiment Pulse Survey, which was conducted in May 2025 to gauge the current state of the middle market amid economic uncertainty.
The survey polled 300 owners and executives of middle market businesses with annual revenue ranging from $25 million to $1 billion.
The survey found that potential tariffs are significantly influencing investment decisions, with most companies prioritizing supply chain adjustments and closely monitoring market signals before implementing growth strategies.
Among the survey highlights:
Tariffs at the Forefront:
- 91 percent of companies are focused on managing tariff impacts as a top priority, showing the broad-based nature of the potential impacts.
- 61 percent of respondents say clarity on U.S. economic health is the most important factor for making business investment decisions.
Resilient and Forward-Thinking:
- 92 percent of companies view current economic policies as an opportunity to innovate their business models and restructure their organizations.
- Middle market firms are somewhat ambivalent about tariffs and the doors they might open for market expansion (49 percent see the upside). In contrast, 68 percent of technology companies are quite confident, likely due to the burgeoning demand for software to navigate supply chain expenses.
Strategic Adjustments in Response to Tariffs:
- 60 percent of companies are adjusting their supply chain strategies to manage tariff costs, the top choice among respondents. This increases to 74 percent for larger companies with revenue between $500 million and $1 billion. 53 percent are passing costs to customers and 47 percent to vendors.
- Among these larger companies, 88 percent are in the process of enhancing technology to improve supply chain visibility, and 71 percent are broadening their supplier base to mitigate risks.
Economic Clarity and Capital Access:
- 87 percent of companies are actively seeking to expand their access to capital, strengthening their balance sheets, and demonstrating the proactive nature of this segment.
— The top three methods for achieving this expansion are adopting technology and automation (52 percent), expanding equity capital (43 percent), and improving cash flow management (43 percent).
“Despite the uncertainty surrounding tariffs and economic policies, our pulse survey shows that middle market companies are not just reacting, but proactively innovating and adapting,” says Ken Gavrity, head of Key Commercial Bank.. “This resilience and forward-thinking approach are key to gaining a competitive edge. It underscores the entrepreneurial spirit that drives America’s middle market and reinforces our commitment to supporting their growth ambitions.
“Middle market companies aren’t waiting for perfect conditions — they are creating their own opportunities,” Gavrity adds. “The businesses that thrive will be those that can adapt quickly, invest wisely in technology, and maintain strong relationships with capital providers who understand their vision.”
Key is one of the nation’s largest bank-based financial services companies, with assets of approximately $189 billion at March 31, 2025. The bank provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 1,000 branches and approximately 1,200 ATMs.
Other bank services include a broad range of corporate and investment banking products, such as M&A advice, public and private debt and equity, syndications, and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name.
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