How Middle-Market Business Uncertainty Rewrote 2025

As 2025 draws to a close, uncertainty is the defining feature of the year for middle-market firms. The scope of tariffs remains unclear, policy signals continue to change repeatedly and global demand looks shakier than ever. This collective dynamic forces companies to plan and act with limited visibility, making uncertainty around finance, operations and product strategy the new normal.

While uncertainty has been pervasive, its impacts are unevenly distributed. The goods segment continues to feel the greatest strain. More than one-third of CFOs at goods firms report high operational uncertainty, matching peak levels seen in early 2025 and up sharply from readings before the tariff barrage on “Liberation Day” in April. Services firms are far less exposed, with a much larger share reporting low uncertainty—underscoring that tariffs and supply-chain sensitivity asymmetrically drive risk across sectors.

The prolonged uncertainty has taken a toll. More than half of firms fell short of their 2025 performance goals, and margin pressure is most acute for those operating under high uncertainty. In response, many companies have adopted a defensive posture, shifting away from long-term growth in favor of immediate cost controls and operational adjustments. Looking to 2026, most firms still expect growth, but confidence remains tightly linked to uncertainty levels—pointing to an uneven recovery with clear winners and losers.

These are just some of the findings in “How Middle-Market Business Uncertainty Rewrote 2025,” a PYMNTS Intelligence exclusive report. This edition of the Certainty Project examines how firms are adjusting product and operational strategies in response to tariffs. The study draws on insights from a survey of 60 CFO at U.S.-based middle-market businesses with annual revenues between $100 million and $1 billion. The survey was conducted from Nov. 20, 2025, to Nov. 26, 2025.

• Uneven Intensity
• Reset Mode
• Growth Ahead?
• Read More
• Methodology

Uneven Intensity

Operational uncertainty in 2025 intensified unevenly, with goods firms experiencing a sharp midyear climb while services firms enjoyed relative stability.

November 2025 marked a full year since President Donald Trump was elected to a second term, and the last 12 months brought a tidal wave of uncertainty for middle-market goods firms. In the latest survey, 35% of CFOs at these companies reported high levels of operational uncertainty, matching the peak set in August. This compares to less than 10% in November 2024 and February 2025, before April’s “Liberation Day” announcement of “reciprocal” levies on most countries. Moreover, just 12% of goods firms in the latest survey reported low uncertainty, the smallest share since our data-driven research on this topic began.

The results make it clear that for goods firms, uncertainty has hit a new peak, emphasizing how severely the tariff campaign and volatile global demand have impacted supply chains. In practical terms, for CFOs and other decision-makers, this means that by mid-2025, uncertainty ceased to be external noise and became a tangible operating constraint. This set the stage for defensive strategic shifts seen later in the year.

The services segment remains comparatively stable. In fact, 55% of CFOs at services firms reported low uncertainty levels in the latest survey, more than did so a year earlier at the time of the election (45%). Still, more than one-quarter (28%) reported high operational uncertainty, slightly below the November 2024 level (31%).

The goods-versus-services divide also defines outlooks for the next year. In the latest survey, only 41% of CFOs at goods firms thought operational uncertainty would improve over the next 12 months. Optimism in the goods segment was far higher a year earlier, at 74%. Services firms show almost exactly the opposite trajectory. In November 2025, 76% of CFOs at these companies believed uncertainty would improve, nearly double the share with this view a year earlier.

Reset Mode

Due to uncertainty, CFOs are closing 2025 in reset mode rather than recovery mode.

Most middle-market firms are closing out 2025 on a downbeat note after missing their performance targets. Overall, 52% of CFOs surveyed report that their companies fell short of the goals they had set for the year, while 27% met expectations and only 22% outperformed. Goods companies fared especially poorly, with 65% missing expectations, though nearly half of services firms (48%) also fell short.

Uncertainty proves to be the primary factor, even more so than the space in which a firm operates. More than eight in 10 companies (82%) operating in a high-uncertainty environment failed to meet expectations, whereas just 28% of low-uncertainty firms did so. This underscores how operational volatility translates directly into financial outcomes. Meanwhile, business scale had virtually no impact. Firms with $100 million to $400 million a year in revenue showed nearly identical results to those in the $400 million to $1 billion bracket.

Uncertainty has affected business margins.

Pressure on operating margins played a central role in the challenges middle-market firms faced over the last year. More than four in 10 (41%) of CFOs at goods companies say their margins fell, while just 12% report improvements. Services firms fared better but still felt the squeeze, with more citing decreases (38%) than increases (31%).

As seen with overall business performance, uncertainty stands out as the biggest determinant for margin health. More than three-quarters (76%) of CFOs at high-uncertainty firms report a drop in operating margins in 2025, compared to just 12% and 22% of those at low- and medium-uncertainty companies, respectively. Also notable is that half of firms with more than $400 million in annual revenue reported improved margins, compared to only 21% of those in the $100 million to $400 million bracket. This echoes findings from earlier Certainty Project surveys that larger companies have been better able than smaller ones to cushion the impact of tariffs and macroeconomic pressures by raising prices and dropping underperforming products.

With middle-market firms widely struggling to meet performance goals and protect their operating margins, it’s no surprise that many have turned to defensive strategies. More than one-third of CFOs surveyed (35%) said their firms prioritized strengthening risk management and compliance in 2025. Nearly as many companies focused on reinforcing supply chain resilience and improving customer experiences or service delivery, each at 30%.

Growth initiatives, meanwhile, took a backseat. For example, roughly one in eight companies prioritized launching new products or services (13%) or expanding into new markets or segments (12%). Technology investments also got little attention. Just 15% of firms prioritized artificial intelligence, and even fewer focused on digital transformation or advancing their payment processes.

Growth Ahead?

Growth is the top priority for 2026, but its pace and structure will vary sharply across industries and confidence levels—a split that signals divergent recovery paths with winners and losers.

Middle-market firms look ready to stop focusing on defense. In 2025, more than two-thirds of CFOs surveyed (68%) expect their firms to grow. Optimism runs highest among those at services firms, at 69%, but over half of CFOs at goods firms (53%) also predict growth in the new year.

Once again, uncertainty takes center stage. Among firms operating under high uncertainty, just 24% expect revenue growth in 2026, while 35% anticipate a decline. In contrast, nearly all firms reporting low uncertainty (96%) expect growth next year. Performance in 2025 also provides a strong signal.

Overall, firms widely enter 2026 with a self-prescribed growth mandate. A closer look at the data confirms a greater willingness to invest in expansion next year, although the differences look incremental and cautious. For example, 25% of CFOs reported that their companies are ready to prioritize digital transformation in 2026, nearly twice as many as in 2025 (13%). Market expansion—either into new geographies or into new customer segments—shows a similar increase, from 12% in 2025 to 23% in 2026. The importance of supply chain improvements remains significant, with 40% of CFOs reporting that their firms will prioritize this next year, compared with 30% in 2025.

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Methodology

“How Middle-Market Business Uncertainty Rewrote 2025” is based on a survey conducted from Nov. 20, 2025, to Nov. 26, 2025. The report examines how firms are adjusting their product and operational strategies in response to tariffs. It draws on responses from a survey of 60 CFOs at U.S.-based middle-market businesses with annual revenues between $100 million and $1 billion.