Mid-market optimism drops six points as Iran war drives a sharp rise in uncertainty

Press Release

Mid-market optimism drops six points as Iran war drives a sharp rise in uncertainty

31 Mar 2026

The war in Iran has seen mid-market business optimism fall sharply in the first quarter of 2026, down six points to 68%, according to Grant Thornton’s latest International Business Report (IBR). 

Business leaders indicate concern about the war's impact on lead times and the cost of shipping or delivery of goods, with those expecting this to increase up five points to 47%. There is also a four point increase in concerns over a shortage of orders due to reduced demand (up to 48%).

The IBR also shows a five point increase in concerns over geopolitical disruption, with 51% of business leaders seeing it as a constraint on their business, feeding through to a four point increase in concerns over economic uncertainty according to 57% of respondents.

While the war will clearly continue to have an impact, especially if the Strait of Hormuz remains closed or restricted for an extended period, the sad reality is the mid-market has plenty of recent experience to call upon. From Russia’s invasion of Ukraine to the adjustments required during Covid, businesses have become increasingly adept and effective at responding to major market shocks. 

This recent experience of managing shocks to energy markets and supply chains may explain why expectations for profitability remain unchanged, with 64% still expecting to see an increase.

It appears most are hoping for a short conflict that they can absorb, with only a two point rise in those expecting to increase selling prices to counter inflationary pressures – up to 51% expecting to do so.

That hope seems to be flowing through to their global ambitions with little to no change for those expecting to increase exports (51%), revenue from non-domestic markets (46%) and the ratio of employees focused on non-domestic markets (37%). 

Greg Keith, CEO of Grant Thornton International, commented: “This quarter’s drop in optimism reflects the very real geopolitical events like the war in Iran have on businesses around the world. But other indicators highlight how used mid‑market businesses have become to navigating uncertainty. They’ve built this resilience during Covid and the war in Ukraine. What matters now is how long this period of instability lasts. The mid‑market can adjust quickly, but prolonged uncertainty inevitably weighs more heavily.”

Greg added: “Despite the drop in optimism, businesses continue to invest in technology, people and innovation. That is a strong signal. The fundamentals remain intact — and while leaders must respond pragmatically to shocks like this, it’s clear they are focused on managing for the long-term.”