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Middle Market Momentum
Middle Market Momentum: Growth is Back, Hiring is Cautious, and AI Is Eating the CapEx Pie
The latest National Center for the Middle Market Indicator shows the sector ended 2025 on a strong note — 85% of firms reported revenue growth, and the average year-over-year growth rate hit 11.7%, just below the post-pandemic average.
Revenue Is Strong. Hiring Is More Restrained.
Only 56% of middle market firms increased headcount in 2025, and employment growth (7.8%) lags the 9.8% post-pandemic norm — widening the gap between output and people. Leaders say it’s easier to find qualified talent than in prior years, but they’re still hiring with care.
Where’s the Money Going?
Investment appetites rebounded: if you gave middle market leaders an extra dollar today, 65% would invest it vs. 35% who would save — back to late-2024 levels. And AI is the #1 destination for new dollars (53% plan near-term AI investment), up from 44% midyear. On average, companies say AI has already replaced or reduced the need for human work by 18%.
Macro Confidence Remains Guarded — but Improving
Confidence in the macro picture remains guarded — with a slight uptick in global confidence as concerns over tariffs and geopolitical risk ease. So leaders are doubling down on what they can control: technology upgrades, digital transformation, and upskilling to drive productivity.
What This Means for 2026
2026 will reward middle market operators who pause to notice, focus on evidence-based AI bets, and link tech spend to measurable customer, revenue, or cost outcomes. The playbook: targeted AI pilots, clear guardrails, change-ready teams, and leadership that keeps people at the center.
A Question Worth Sitting With
If you had one incremental dollar to allocate this quarter, where would it go — and what outcome would prove it worked?
Growth is returning, investment is rising, and AI is reshaping what’s possible—but clarity, not speed, is what will set leaders apart in 2026.
If you’re ready to pause, notice the signals in your own organization, and turn them into smart, measurable action, our team can help you chart the next step.
Let’s explore where your next incremental dollar should go—and what success would look like when it gets there.
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