U.S. small and middle-market enterprises are signaling a shift toward expansion and capital investment, even as persistent macroeconomic pressures force many to adopt a cautious, wait-and-see approach. According to the 2026 Columbia Bank Business Barometer, which surveyed nearly 1,200 firms, business leaders are prioritizing growth-oriented spending over cost-cutting, marking the strongest investment trajectory since the study’s inception in 2019.
Growth Outlook and Investment Priorities
Confidence in the 12-month outlook remains high, with 72% of respondents anticipating increased demand, 67% expecting revenue growth, and 59% projecting higher profitability. This optimism is largely tied to technological transformation. Artificial Intelligence (AI) has emerged as the primary investment priority, with nearly all surveyed businesses (96%) expecting AI to drive productivity gains.
However, this bullish outlook is tempered by near-term volatility. Approximately 60% of businesses report plans to delay major financial decisions for at least six months to navigate ongoing concerns regarding inflation, energy costs, and tariff uncertainty.
The Dual Challenge of Fraud and Tariffs
As firms look to scale, they are simultaneously grappling with increasing operational risks, specifically cybersecurity and fraud. The report notes that 7 in 10 businesses experienced financial losses due to fraud in the past year, with phishing and fake vendor scams being the most prevalent. Despite this, many firms remain under-prepared.
“While cybersecurity and fraud prevention are investment priorities for businesses, our research indicates that half or fewer have implemented many of the most common fraud prevention tools,” said Kathryn Albright, Head of Global Payments and Deposits at Columbia Bank.
Tariff policy also remains a complex variable for business planning. While direct costs are a factor, firms identified the volatility of tariff implementation—including shifting exemptions and unpredictable timing—as a more significant impediment to planning than the price tags themselves. Small businesses are generally more inclined to pass these costs on to consumers, whereas middle-market companies are more likely to rely on credit lines or defer hiring and investment.
Strategic Investment Intentions
Despite the prevailing uncertainty, the appetite for strategic investment remains robust among the surveyed cohort:
- Digitization: 89% of firms plan to invest in new digital areas.
- Expansion: 70% are likely to leverage borrowing to fund growth.
- Real Estate: 62% intend to expand their physical footprint.
- Human Capital: 51% expect to increase their total headcount.
- M&A: 36% are considering potential business acquisitions.
As firms navigate the next year, the balance between aggressive digital adoption and defensive risk management will likely define the winners in the small and midsize business landscape.
