Midsized businesses batten down the hatches

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Mid-market businesses are focused on cost containment and protecting their fundamentals as they close out 2025, according to a pulse survey from CBIZ. The financial, insurance, and advisory firm polled CBIZ analysts and more than 1,200 leaders from midsized businesses across a wide range of industries, including construction, consumer goods, food and beverage, life sciences, and technology, in October 2025.

Benefits costs and the labor market are significant headwinds for midsized businesses, the survey found. Almost two-thirds of respondents (62%) said that healthcare and benefits costs had harmed their business in the past three months, and 43% said labor market trends had hurt them. Some of the labor factors they may be referring to include wage competition and talent shortages in areas such as finance, construction, and technology, CBIZ reported.

Tariffs and global trade policy were also a key concern. Nearly six in 10 (59%) respondents said tariffs had hurt their businesses over the past three months, and only 3% said they had helped. Nearly half (47%) cited supply chain performance as a cost pressure. Tariffs are making supply chains more complex while cutting into margins, according to CBIZ, and companies are taking steps to manage them including buying from a wider range of suppliers, negotiating contracts, and considering onshoring.

Spending on pause: Midsized businesses paused or delayed many growth initiatives in the time period, the survey found. Most frequently (46%), they opted to hold off on M&A activity, suggesting that the recent M&A boom is dominated by large firms. More than a third of respondents (37%) said they were pausing capital expenditures, mostly due to financing costs, and 32% weren’t growing their workforces.

Leaders of midsized businesses also said they had continued to focus on controlling costs for goods and services (37%) and labor (26%). They’re mainly investing in fundamentals such as customer service and support (70%); compliance, legal, and insurance (68%); and business-critical technology (54%).

Despite the emphasis on cost discipline, survey respondents had a somewhat brighter outlook on the economy this quarter. A little under half (47%) said they were optimistic, up from 39% last quarter.