Business Leaders Cautiously Optimistic Despite Uncertainty

On Mar 14, 2025

Two surveys released by Citizens designed to capture the challenges and opportunities for middle market businesses in 2025 and beyond revealed that middle-market leaders in the Tri-state region are navigating uncertainty while remaining poised to make key longer-term investments in technology, talent and growth.

“Tri-state business leaders came into the year optimistic about business conditions, and that cautious optimism remains despite ongoing macroeconomic volatility,” said Rebecca O’Connell, New York Metro Market President, Citizens. “As area businesses evaluate the rapidly shifting environment, our local team of experienced bankers is here to help clients navigate the uncertainty and reach their goals.”

The two surveys, which surveyed middle-market business leaders between January and February, include:

The Citizens Business Leaders Survey polled decision makers at mid-size US businesses about their outlook for economic conditions and assessment of key business inputs in the year ahead.

The Middle Market Business Challenges Survey highlighted challenges that middle market companies face as it relates to workforce development and sustainability.

Concerns Persist But Businesses Plan to Hire and Invest More in 2025

The Business Leaders Survey found middle market companies are heading into 2025 fully aware that uncertainty isn’t going anywhere – but they’re not sitting still. Nearly two-thirds (60%) of New York middle market business leaders expect their companies to hire more personnel this year, while 76% plan to invest more in growth than they did in 2024. Only 8% of leaders expected their organization to reduce personnel in 2025.

The results underscore a sense of cautious optimism about the business outlook for 2025, as 90% of leaders believe their business is in a better financial position now than it was a year ago – an outlook that stands in sharp contrast to the broader economic indicators dominating headlines.

The willingness to invest comes even as inflation, interest rates and tariffs weigh heavily on decision making. While inflation was the number one concern for business leaders, at 53%, a plethora of other factors gave leaders pause. Respondents identified interest rates (48%), financial market volatility (41%), tariffs (37%), a possible recession (35%), technological advancements (35%) and increased taxes (34%) as other key factors representing the greatest risk to companies’ financial performance in 2025.

These mixed signals – spending and hiring in the face of mounting risks – reflect a middle market segment that’s neither bullish nor bearish, but pragmatic: betting that investments in technology, talent and operational resilience will help them navigate whatever comes next.

Workforce Challenges Are Myriad, But Benefits Significant

Attracting and keeping the right people has become a full-time job for Tri-state middle market leaders, with 82% saying recruitment and retention are a top or high priority and 87% expecting workforce challenges to directly impact their growth over the next 3-5 years. Hiring and keeping talent is a multi-front battle. Leaders say a lack of qualified/skilled candidates (33%), a lack of candidates with necessary soft skills (33%), and limited training resources (31%), are all the top challenges they’re facing when it comes to recruitment. Once talent is in the door, competition from other companies (38%), skills gaps (27%), compensation pressures (26%) and limited training resources (27%) are making retention difficult.

Middle market companies are throwing everything they have at the talent problem – increasingly, that means investing in both people and technology. In a clear sign that compensation alone is not enough in today’s market, more than half (52%) of Tri-state business leaders said they are improving workplace culture and employee engagement to address workforce issues. Meanwhile, 38% are offering increased compensation packages and 37% are looking to partner with third-party organizations such as government, nonprofits, and educational institutions.

These workforce investments are delivering real returns. Nearly two-thirds (62%) of middle market companies said that they’ve seen essential or substantial benefits to their business’s growth, including improved employee engagement and satisfaction (48%), stronger alignment with company culture and goals (47%) and increased productivity and efficiency (45%).

To help prepare students and workers with the skills needed to meet evolving industry demands, Citizens announced that as part of it’s recent $10 million two-year commitment to support workforce development, $3.75 million will go to organizations in New York and New Jersey. Funding will support programming that is enhancing and expanding access to educational and career opportunities and driving long-term economic growth for local New York and New Jersey businesses.

“Workforce development is critical to the economic health of our Tri-state metro community,” said O’Connell. “Citizens is committed to working with organizations to develop training programs designed to build tomorrow’s business leaders and deepen our relationships across the community.”

Sustainability is Core to Business Strategy for Tri-state Companies

As local companies look to future-proof their operations, 68% of Tri-state middle market executives have increased concern about severe weather and climate hazards. Nearly half (46%) are planning to integrate new technologies to better understand and mitigate the impacts of severe weather and climate hazards while 42% are collaborating with, and diversifying, suppliers to mitigate impacts. Companies are also planning to strengthen their financial planning (41%) and make formal risks assessments (39%). This signals how companies are moving beyond awareness to implementation as severe weather disruptions become commonplace.

Methodology

Citizens Business Leaders Survey: Business leaders at 502 middle market US businesses who are directly involved in corporate decision-making completed a web-based survey in February 2025.

Citizens Middle Market Business Challenges Survey: C-level executives at 250 middle market U.S. businesses completed a web-based survey between January and February 2025.

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