BMO Business Outlook: 2026 is all about execution

U.S. businesses are entering 2026 with cautious confidence – and a clearer willingness to act. 

BMO’s latest Business Outlook shows leaders moving out of pause mode as economic visibility improves. Instead of holding back, companies are making more deliberate decisions about where to invest, how to grow and how to protect margins. 

Across industries, the focus has shifted back to fundamentals: productivity, capital efficiency and disciplined execution. After a year of uncertainty around rates, trade policy and geopolitics, many leaders are reengaging – carefully, but with intent. 

AI moves from pilots to productivity 

One of the clearest signals in the Outlook is how companies are using AI. In 2026, the emphasis isn’t on experimentation – it’s on execution. 

Businesses are deploying AI and automation in practical ways to streamline operations, improve productivity and free up resources for higher value work. The goal is measurable impact, not hype. 

“We’re seeing a clear shift from ‘wait-and-see’ to disciplined execution. In this environment, the winners won’t be the companies that take the most risk – they’ll be the ones that allocate capital well, protect margins and put technology to work in ways that measurably improve productivity.” 

- Tony Sciarrino
Head, BMO Commercial Bank, U.S.

National outlook: solid tailwinds and uneven conditions 

At the national level, the U.S. economy has meaningful supports, including AI-driven investment and easing policy headwinds. At the same time, uncertainty around trade, inflation and geopolitics remains elevated. 

Capital markets activity is beginning to thaw, though unevenly. Loan demand is improving, underwriting remains disciplined and M&A activity is picking up selectively – particularly for bolt-on acquisitions. 

“AI-related investment remains a key growth tailwind, but the environment still requires careful navigation. Productivity and execution will be critical differentiators, especially as businesses balance opportunities created by technology with ongoing uncertainty across trade and inflation.” 

- Scott Anderson
Chief U.S. Economist, BMO

One theme across regions: execution 

While conditions vary by market – resilience, modernization and manufacturing strength across the Midwest; AI infrastructure tailwinds alongside affordability and labor-market constraints in the West; moderating growth and strong fundamentals across the South – priorities are strikingly consistent: 

• Execute with discipline by protecting cash flow and margins 
• Put AI to work in practical, productivity driven ways 
• Invest selectively through phased capex, targeted hiring, and strategic M&A 

The takeaway? 2026 is the year for smart execution.