2025 Business Barometer: What’s shaping strategy for small and middle market businesses

Columbia Bank has long championed small and mid-sized businesses, recognizing that when businesses thrive, everyone thrives. Understanding how the current economic and societal climate affects their decisions is key, and seeing how they pivot in response to larger trends and marketplace pressures offers useful insights that allow us to measure the overall business climate.

At Columbia, our banking approach is grounded in understanding. We look closely at each customer’s needs while also considering how their strategies align with broader market trends. This dual perspective helps us deliver smarter, more relevant support.

Earlier this month, we hosted our annual Business Barometer Findings Webinar, bringing together leaders from across the bank to unpack the latest insights from our 2025 survey. The discussion explored how small and middle market businesses are navigating today’s economic landscape and what’s driving their decisions for the year ahead.

Here are four key takeaways from the conversation:

• The survey revealed a notable shift in small business sentiment: expectations for economic improvement jumped 14 points, marking the second-highest level on record. EVP Dave Hanson noted, “People are feeling like, OK, it’s getting a little bit clearer what’s going on. So therefore, we are feeling a little more optimistic about where we’re headed.” Middle market businesses remain broadly optimistic, though slightly more measured than last year. Across the board, businesses are balancing growth ambitions with a sharper focus on cost containment.
• Cybersecurity is a daily priority for every business, with 80% of businesses reporting fraud attempts in the past year. Kathryn Albright, EVP of Global Payments and Deposits, emphasized that business email compromise remains the top threat - especially for wire transfers and check payments. “Education is critical,” Albright shared. “We’re seeing businesses of all sizes increase their focus on fraud prevention tools and regular audits to identify vulnerabilities.” For small businesses in particular, proactive protection is essential given tighter margins and limited working capital.
• While tariffs have introduced new cost pressures, many businesses are taking a strategic, long-term view. EVP Richard Cabrera explained, “A lot of companies decided, ‘Let’s absorb this in the short term and use the time to evaluate alternate supply sources and cost structures.’” Rather than reacting abruptly, businesses are gradually adjusting pricing and sourcing strategies to maintain stability and competitiveness.
• Generative AI is a top-three investment priority for small businesses and the leading priority for middle market firms. Nearly half of small businesses plan to adopt AI tools in the next 12 months. As Hanson explained, “The acceleration of how fast we can move and improve processes is one of the biggest things coming from AI.” From smarter inventory management to enhanced customer service, businesses are finding practical ways to integrate AI and unlock new efficiencies.

Want to dive deeper into the findings? Download your copy of the 2025 Business Barometer or watch the recording of our webinar below.