Report shows that 2026 business climate holds optimism balanced by vigilance
First Financial Bank survey of more than 500 Midwestern middle market business leaders captures picture of economic outlook
Business leaders must assess and reassess the forces shaping their environment, the investments that matter most, and the risks and opportunities that will define their next phase of readiness. To better serve clients and understand their perspectives First Financial administered a survey of middle market business leaders across the five-state footprint.
The survey probed into how different business leaders see the landscape and where they are placing their bets, with emphasis on the capabilities they believe will sustain competitiveness and resilience. Responses indicated that businesses entered 2026 with momentum and optimism, along with intensifying complexity and established headwinds. Leaders prepared for continued growth, but with a sharper eye on risk, efficiency, and modernization.
The responses are compiled into a report called The State of the Business1, including the following key takeaways:
1. Economic optimism is high.
2026 has been marked by optimism among business leaders with two-thirds feeling positive about the country’s overall economic outlook, and an even stronger three-fourths feeling optimistic about the economic trajectory of their specific industry. Optimism is especially pronounced among C-Suite executives and business owners, with three-quarters bullish on the broader economy and 83% positive about their industry. The tone for 2026 has been clear: leaders see momentum.
2. Confidence is grounded in real performance gains.
Business leaders aren’t optimistic because of hope alone. They cite improved business performance over the past year (from February 2025 to February 2026): 81% report revenue growth and almost all expect that growth to continue. The result has been widespread confidence, with 8 in 10 believing they will hit their revenue goals leading into 2027. Most also anticipate at least modest improvements in profit margins, signaling a belief that performance strength will carry forward.
3. Inflation is a headwind, not a confidence breaker.
A majority of business leaders (52%) cite inflation as the single biggest economic risk facing their companies, and 85% say it is having at least a moderate impact on their bottom line. Rather than undermining optimism, leaders view higher input costs as a manageable reality, one they feel equipped to navigate through pricing strategies, cost management, workforce realignment, and automation. In the 2026 business environment, confidence reflects adaptation, not denial.
4. Credit demand is rising as businesses prepare to invest in technology infrastructure.
More than half of companies (56%) expect their need for credit to grow, and 71% anticipate increased capital expenditures through February 2027. Investment in digital tools is closely tied to this rising demand for credit. Companies cite cloud migration and cybersecurity as their most prominent focus areas for capital spending. Together, these patterns point to a clear trend: businesses are turning to credit to fund the technology upgrades required for modernization and long-term resilience.
5. Fraud exposure is real and testing operational resilience.
Nearly half of companies (41%) experienced a known fraud attempt from February 2025 to February 2026, with exposure even higher among larger firms ($50MM+, 56%) and financial services companies (70%).
Summary
Most companies view their future from a position of strength, but persistent macroeconomic and operational pressures — from inflation and labor costs to regulatory complexity and technology risk — shape decision‑making. Leaders are repositioning for a more digital, global, and efficiency‑driven future. Businesses are not just seeking capital; they are seeking clarity. They want trusted collaborators who can help them navigate credit strategy, liquidity, modernization, and risk.
Ultimately, the organizations best prepared for the future will be those that balance growth ambitions with disciplined risk management and adaptability. They will modernize with intention, invest in resilience, and build the capabilities needed to navigate a variety of economic climates.
Now is not the time to be still. It’s the time to move forward. Move forward with a team that understands the terrain. Reach out to your First Financial banker today to learn more about the survey findings and how they can inform your business decisions for the coming year.
