Middle Market Business Leaders are Confident in Company Financial Performance, Reaching Highest Level in Two Years
KeyBank's semi-annual Middle Market Sentiment Report reveals a surge in optimism among middle market businesses, with 78% reporting an excellent/very good outlook for the next 12 months. The survey of over 700 companies with $10M to $1B in annual revenue shows:
- 50% have a positive U.S. economic outlook
- 90% anticipate M&A involvement on the buy-side in the next two years
- 54% plan to implement AI in the next six months
Despite challenges like inflation (34%), higher labor costs (30%), and interest rates (29%), businesses are leveraging technology and automation for growth. However, 87% plan to tap alternative capital sources due to tight access. Cybersecurity remains a concern, with 32% experiencing issues in the past year.
Il rapporto semestrale sul sentiment del mercato medio di KeyBank rivela un aumento dell'ottimismo tra le imprese di mercato medio, con il 78% che riporta una prospettiva eccellente/molto buona per i prossimi 12 mesi. L'indagine su oltre 700 aziende con entrate annue comprese tra 10 milioni e 1 miliardo di dollari mostra:
- Il 50% ha una visione positiva dell'economia statunitense
- Il 90% prevede di essere coinvolto in operazioni di M&A dal lato dell'acquisto nei prossimi due anni
- Il 54% prevede di implementare l'IA nei prossimi sei mesi
Nonostante le sfide come l'inflazione (34%), i costi del lavoro più elevati (30%) e i tassi d'interesse (29%), le imprese stanno sfruttando la tecnologia e l'automazione per crescere. Tuttavia, l'87% prevede di attingere a fonti di capitale alternative a causa dell'accesso limitato. La sicurezza informatica rimane un problema, con il 32% che ha riscontrato problemi nell'ultimo anno.
El informe semestral de Sentimiento del Mercado Medio de KeyBank revela un aumento del optimismo entre las empresas de mercado medio, con el 78% reportando una perspectiva excelente/muy buena para los próximos 12 meses. La encuesta a más de 700 empresas con ingresos anuales de 10 millones a 1 billón de dólares muestra:
- El 50% tiene una visión positiva de la economía estadounidense
- El 90% anticipa participación en fusiones y adquisiciones en el lado de compra en los próximos dos años
- El 54% planea implementar IA en los próximos seis meses
A pesar de desafíos como la inflación (34%), los costos laborales más altos (30%) y las tasas de interés (29%), las empresas están aprovechando la tecnología y la automatización para crecer. Sin embargo, el 87% planea recurrir a fuentes de capital alternativo debido a un acceso restringido. La ciberseguridad sigue siendo una preocupación, con el 32% experimentando problemas en el último año.
KeyBank의 반기 중간 시장 감정 보고서는 중간 시장 기업들 사이에서 낙관주의 증가를 드러내며, 78%가 향후 12개월 동안의 전망이 매우 좋음/좋음을 보고하고 있습니다. 연간 수익이 1천만에서 10억 달러 사이의 700개 이상의 기업을 대상으로 한 설문조사는 다음과 같은 내용을 보여줍니다:
- 50%가 미국 경제에 대해 긍정적인 전망을 가지고 있습니다
- 90%가 향후 2년 내에 인수 합병에 참여할 것으로 예상하고 있습니다
- 54%가 향후 6개월 내에 AI를 도입할 계획입니다
인플레이션(34%), 높은 노동비용(30%), 금리(29%)와 같은 도전 과제가 있음에도 불구하고 기업들은 성장을 위해 기술과 자동화를 활용하고 있습니다. 그러나 87%는 접근이 제한되어 있어 대체 자본 출처를 활용할 계획입니다. 사이버 보안은 여전히 우려 사항으로, 32%가 지난 1년간 문제를 경험했습니다.
Le rapport semi-annuel sur le sentiment du marché intermédiaire de KeyBank révèle une augmentation de l'optimisme parmi les entreprises du marché intermédiaire, avec 78% déclarant une excellente/très bonne perspective pour les 12 prochains mois. L'enquête menée auprès de plus de 700 entreprises générant entre 10 millions et 1 milliard de dollars de revenus annualisés montre :
- 50% ont une vision positive de l'économie américaine
- 90% prévoient une participation à des fusions et acquisitions du côté des acheteurs dans les deux prochaines années
- 54% prévoient de mettre en œuvre l'IA dans les six mois à venir
Malgré des défis tels que l'inflation (34%), l'augmentation des coûts du travail (30%) et les taux d'intérêt (29%), les entreprises exploitent la technologie et l'automatisation pour croître. Cependant, 87% prévoient de faire appel à des sources de capital alternatives en raison d'un accès restreint. La cybersécurité reste une préoccupation, avec 32% ayant rencontré des problèmes au cours de l'année écoulée.
Der halbjährliche Middle Market Sentiment Report von KeyBank zeigt einen Anstieg des Optimismus unter den Unternehmen im mittleren Markt, wobei 78% eine ausgezeichnete/sehr gute Aussicht für die nächsten 12 Monate berichten. Die Umfrage unter über 700 Unternehmen mit einem Jahresumsatz von 10 Millionen bis 1 Milliarde Dollar zeigt:
- 50% haben eine positive Sicht auf die US-Wirtschaft
- 90% rechnen mit Beteiligungen an Fusionen und Übernahmen auf der Käuferseite in den nächsten zwei Jahren
- 54% planen, KI in den nächsten sechs Monaten einzuführen
Trotz Herausforderungen wie Inflation (34%), höheren Arbeitskosten (30%) und Zinssätzen (29%) nutzen die Unternehmen Technologie und Automatisierung für ihr Wachstum. Dennoch plant 87% alternative Kapitalquellen zu nutzen aufgrund des eingeschränkten Zugangs. Die Cybersicherheit bleibt ein Anliegen, da 32% im vergangenen Jahr Probleme gehabt haben.
- 78% of business owners report an excellent/very good outlook for their company in the next 12 months, up 5% from 2023
- 50% have an excellent/very good U.S. economic outlook for the next 12 months
- 90% of businesses anticipate M&A involvement on the buy-side in the next two years
- 54% plan to implement some form of AI over the next six months, up from 10% in Q4 2023
- 64% report improved efficiency in business operations, up 12% from last year
- 72% expect high interest rates to negatively impact their bottom line within the next six months
- 34% expect inflation to negatively impact business in the next 12 months
- 30% anticipate higher labor costs to negatively impact business in the next 12 months
- 87% are planning to tap alternative sources of capital within the next three years due to tight access
- 32% of middle market businesses have experienced cybersecurity or financial fraud issues in the past 12 months
Insights
The KeyBank Middle Market Sentiment Report reveals a significant uptick in business confidence, with 78% of middle market companies reporting an excellent or very good outlook for the next 12 months. This
The report highlights a strong appetite for growth through M&A, with 90% of businesses anticipating buy-side involvement in the next two years. This aggressive stance could drive consolidation and potentially boost valuations in the sector. Notably, 87% plan to tap alternative funding sources, indicating potential shifts in the financing landscape that investors should monitor.
The rapid adoption of AI, with 54% planning implementation in the next six months, could lead to improved operational efficiencies and competitive advantages. However, cybersecurity remains a significant risk, with 32% of businesses reporting issues in the past year. Investors should consider both the growth potential and the associated risks in evaluating middle market opportunities.
The surge in AI adoption among middle market companies is a game-changer, with 54% planning to implement AI within six months, up from just
However, the 32% of businesses experiencing cybersecurity or financial fraud issues is concerning. The prevalence of phishing (48%), data corruption (44%) and identity theft (37%) underscores the need for robust cybersecurity measures. As companies digitize operations, they must balance the benefits of AI and automation with increased cybersecurity investments.
The report suggests a tech-driven transformation in the middle market sector. Investors should look for companies leveraging AI effectively while maintaining strong cybersecurity postures. This tech adoption wave could create opportunities for IT service providers, cybersecurity firms and AI solution developers catering to the middle market segment.
AI and automation contribute to optimism despite macroeconomics impacting bottom line
What's At Stake
Middle market businesses represent a large portion of private sector GDP and make up a critical yet often overlooked segment of our national economy. Despite setbacks, the results revealed middle market companies demonstrated remarkable resilience and growth amid this year's persistent market uncertainty. While concerns remain, the shift in confidence has led to a positive company and economic outlook.
Top Middle Market Insights
- Optimism jumps to its highest level in years: Middle market companies continue to demonstrate remarkable resilience and growth with
78% of business owners reporting an excellent/very good outlook for their company in the next 12 months, up5% from 2023. Moreover,50% have an excellent/very goodU.S. economic outlook for the next 12 months, which can be attributed to improved efficiency in business operations (64% ) – up12% from last year – and improvements in technology (60% ). - Macroeconomics still make an impact: The top three factors expected to negatively impact business in the next 12 months include inflation (
34% ), higher labor costs (30% ), and higher interest rates (29% ). Likewise,72% expect high interest rates to negatively impact their bottom line within the next six months. - Business owners see M&A as growth accelerator: Middle market companies have their sights set on growth with
90% of businesses anticipating M&A involvement on the buy-side and51% anticipating involvement on the sell-side in the next two years. - Access to capital remains tight: Middle market companies are increasingly concerned about access to capital, as inflation, interest rates, and high borrowing costs persist. Given the conditions,
87% are planning to tap alternative sources within the next three years – including private equity firms (46% ), private debt lenders (43% ), and commercial lenders (41% ). - Sights are set on AI and automation for scale: Technology and automation have played a critical role in both improved outlook and expansion strategies across the middle market sector. The increasing trend to adopt AI across the market continues with
54% planning to implement some form of AI over the next six months – up from10% from Q4 2023 – to grow their capabilities and improve processes across data analysis, customer and supply chain optimization, content marketing, fraud prevention, and cybersecurity infrastructure. - Fraud continues to be a watch point across the sector:
32% of middle market businesses have experienced cybersecurity or financial fraud issues in the past 12 months. The emergence of cybercrimes has pushed the middle market to move quickly to protect their businesses against the top three cyber or fraud occurrences: phishing/email spoofing (48% ); data corruption (44% ); and identify theft (37% ).
From Key Commercial Bank
- "The middle market has a long history of remaining resilient through economic cycles and KeyBank is committed to supporting these businesses. We recognize that their success is not only a testament to their ingenuity and perseverance but also a significant driver of broader economic stability and growth in our communities," said Ken Gavrity, President of Key Commercial Bank.
- "The growing dependence on digital infrastructure is a double-edged sword, creating operating efficiencies and better client experiences, but it also comes with increased potential for cybersecurity and fraud if not managed correctly," said Gavrity. "Our team works with many middle market companies to ensure that they are taking steps to deliberately manage the risks and to leverage the education and tools that are available."
- "A relationship strategy means we get to know your business, your strategy, your team, and how you make decisions. It's about more than offering capital, it's being a strategic advisor that helps you navigate growth, the economic cycles, and the complexities of running a business. We've been doing this for decades and built our whole business around that concept," Gavrity continued.
Methodology
KeyBank surveyed 706 owners and executives of businesses with
About KeyCorp
KeyCorp's roots trace back nearly 200 years to
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SOURCE KeyBank
FAQ
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