91% OF COMPANIES PRIORITIZE TARIFF IMPACT MANAGEMENT IN KEYBANK'S LATEST MIDDLE MARKET PULSE SURVEY

Rhea-AI Summary

KeyBank's latest Middle Market Sentiment Pulse Survey reveals that 91% of middle market companies are prioritizing tariff impact management. The May 2025 survey of 300 businesses with revenues between $25M-$1B shows strong adaptation to economic uncertainty. 92% view current policies as an innovation opportunity, while 60% are adjusting supply chains to manage tariff costs. Notably, 49% see tariffs as a potential competitive advantage, with technology companies being particularly optimistic at 68%. Companies are actively seeking capital access, with 87% strengthening balance sheets through technology adoption (52%), equity capital expansion (43%), and improved cash flow management (43%). Larger companies ($500M-$1B revenue) are particularly proactive, with 88% enhancing supply chain technology and 71% diversifying suppliers.

Positive

• 92% of companies view economic policies as an opportunity for business model innovation
• 87% of companies are proactively seeking to expand capital access
• 88% of larger companies are enhancing technology for supply chain visibility
• 68% of technology companies see positive opportunities from tariff situation

Negative

• 53% of companies are passing tariff costs to customers
• Only 49% of middle market firms see upside in tariffs
• 61% require more clarity on U.S. economic health before making investment decisions
• 47% are passing costs to vendors, potentially straining business relationships

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Half of Middle Market Companies See Tariffs as a Competitive Advantage

CLEVELAND, June 12, 2025 /PRNewswire/ -- KeyBank (NYSE: KEY) today released the results of its Middle Market Sentiment Pulse Survey, which was conducted in May 2025 to gauge the current state of the middle market amid economic uncertainty. The survey polled executives of middle market businesses with annual revenues ranging from $25 million to $1 billion and found that potential tariffs are significantly influencing investment decisions, with most companies prioritizing supply chain adjustments and closely monitoring market signals before implementing growth strategies.

Tariffs at the Forefront:

• 91% of companies are focused on managing tariff impacts as a top priority, showing the broad-based nature of the potential impacts.
• 61% of respondents say clarity on U.S. economic health is the most important factor for making business investment decisions.

Resilient and Forward-Thinking:

• 92% of companies view current economic policies as an opportunity to innovate their business models and restructure their organizations.
• Middle market firms are somewhat ambivalent about tariffs and the doors they might open for market expansion (49% see the upside). In contrast, 68% of technology companies are quite confident, likely due to the burgeoning demand for software to navigate supply chain expenses.

Strategic Adjustments in Response to Tariffs:

• 60% of companies are adjusting their supply chain strategies to manage tariff costs, the top choice among respondents. This increases to 74% for larger companies with revenues between $500 million and $1 billion. 53% are passing costs to customers and 47% to vendors.
• Among these larger companies, 88% are in the process of enhancing technology to improve supply chain visibility and 71% are broadening their supplier base to mitigate risks.

Economic Clarity and Capital Access:

• 87% of companies are actively seeking to expand their access to capital, strengthening their balance sheets and demonstrating the proactive nature of this segment.
  • The top three methods for achieving this expansion are adopting technology and automation (52%), expanding equity capital (43%) and improving cash flow management (43%).

Ken Gavrity, Head of Key Commercial Bank commented:

"Despite the uncertainty surrounding tariffs and economic policies, our pulse survey shows that middle market companies are not just reacting but proactively innovating and adapting. This resilience and forward-thinking approach are key to gaining a competitive edge. It underscores the entrepreneurial spirit that drives America's middle market and reinforces our commitment to supporting their growth ambitions."

"Middle market companies aren't waiting for perfect conditions – they are creating their own opportunities," Gavrity added. "The businesses that thrive will be those that can adapt quickly, invest wisely in technology, and maintain strong relationships with capital providers who understand their vision."

Methodology
KeyBank surveyed 300 owners and executives of businesses with annual revenues between $25 million and $1 billion in May 2025.

About KeyCorp
In 2025, KeyCorp celebrates its bicentennial, marking 200 years of service to clients and communities from Maine to Alaska. To learn more, visit KeyBank Heritage Center. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately $189 billion at March 31, 2025.

Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 1,000 branches and approximately 1,200 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications, and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank Member FDIC.

 

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SOURCE KeyBank

FAQ

What percentage of companies are prioritizing tariff impact management according to KeyBank's 2025 survey?

According to KeyBank's Middle Market Pulse Survey, 91% of companies are focusing on managing tariff impacts as a top priority.

How are middle market companies responding to tariff challenges in 2025?

60% are adjusting supply chain strategies, 53% are passing costs to customers, and 47% are passing costs to vendors. Additionally, 88% of larger companies are enhancing technology for supply chain visibility.

What percentage of KEY's surveyed companies view economic policies as an opportunity?

92% of surveyed middle market companies view current economic policies as an opportunity to innovate their business models and restructure their organizations.

How are companies expanding their access to capital according to KeyBank's survey?

87% of companies are expanding capital access through technology and automation adoption (52%), equity capital expansion (43%), and improved cash flow management (43%).

What is the revenue range of companies included in KeyBank's 2025 Middle Market Survey?

The survey included companies with annual revenues ranging from $25 million to $1 billion.