The last year was one of “wait and see” for many large corporate and middle market businesses in the United States, and this attitude is likely to continue to prevail, at least in the near term.

Many business leaders were holding off from making major decisions in 2024, until better understanding how the outcomes of November’s presidential and congressional elections might influence the business environment. But even now, when the results of the races are clear, the potential impacts remain uncertain.

“The bottom line is that many companies are continuing to wait before making decisive investments in their business,” said Terry Begley, head of PNC Corporate Banking. “Even if business leaders make some reasonable inferences based on election results, there’s still a lot of uncertainty about whether inflation and interest rates will continue on a downward trajectory over the next few months. We don’t yet know what the tax or regulatory environment may look like. So, a lot of companies are still watching and waiting.”

But in Begley’s opinion, this level of stasis won’t persist for long. “Businesses are eager to invest and grow – they’ve just been waiting on additional data points to take action. Now that we have passed the demarcation point of the election, some aspects of the picture will soon start to become a little clearer. In certain sectors, there is likely to be an increase in investment in some form, whether through mergers and acquisitions, capex spending, pursuing leveraging artificial intelligence, or other strategic priorities.”

One positive consideration for companies ready to pursue growth strategies is the availability of capital. “There is a lot of liquidity in the market, from both private capital and banks, which is great for businesses and for the economy,” Begley said. “It is, of course, possible that something may happen to affect this down the road, in terms of economic policy or some other mitigating factor. But for now, as we turn the corner on the new year, the capital environment is stable, and businesses have access to liquidity sources.”

Industry Trends to Watch for in 2025

  • Food and Beverage: The health of the consumer continues to weigh on business performance. It will be critical for companies to consider what this means for pricing strategies and demand planning. Innovation will also be important. Read more here.
  • Healthcare: The cost environment is creating a number of significant operational challenges that the healthcare industry is going to have to find ways to navigate in 2025. Inflation and the affordability of labor will continue to be headwinds, and fallout from Medicare Advantage star ratings is likely to have a ripple effect throughout the healthcare industry.  Read more here.
  • Technology: Digital transformation will be a strong driver for all segments of technology in 2025. For AI, this year may be something of an inflection point, as businesses weigh whether the elevated expenditure is worth the investment. Cybersecurity will continue to be a major area of focus in IT spending. The cyclical nature of technology contracts may lead to an adjustment in IT spending for some companies, as many contracts are up for renewal this year. Read more here. 

Brilliant Begins Here

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