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July 22, 2025

Economic & Market Outlook: What CEOs Should Know Now

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Slowing growth, rising costs, and shifting talent dynamics are reshaping the competitive landscape.
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July 22, 2025

Russ Lange

Partner

A fervent believer in the promise of human powered growth, Russ leads CMG in partnering with companies to help them become aligned, agile, customer-driven enterprises that unleash the potential of their organizations with sustainable improvements in focus, teams, culture, and process our clients.

About The Author

Mark Chinn

Partner

Mark leads CMG in partnering with Telecom companies to help them increase customers and accelerate revenue. His 25+ years of experience in growth, strategy and execution includes B2C and B2B multi-channel acquisition programs, customer experiences that surprise and delight, pricing that optimizes customer value, and innovative product development.

Blog by Gary Lancina

The economic shakeups from early 2025 have settled into recognizable trends halfway through the year. Companies that adapted quickly now have a head start as 2026 planning gears up.

Here's what the data tells us and what it means for your strategic decisions.

Economic Realities: The New Baseline

Growth is slowing. GDP growth dropped from 2.8% in 2024 to 1.5% this year and will likely fall further in 2026.

What it means: Competition will intensify as markets tighten.
What to do: Focus on efficiency and keeping your best customers. Smart optimization will grow the bottom line.

Labor markets are cooling. Job gains so far in 2025 have slowed significantly, likely leading to a rise in unemployment over the coming months.

What it means: Talent upgrade opportunities may emerge while retention of key team members becomes critical.
What to do: Identify skills gaps early and invest in upskilling before competitors do. Consider how federal workforce reductions might affect your contractor relationships.

Inflation isn't uniform. Inflation persists above the Federal Reserve’s target but varies dramatically by sector.

What it means: Pricing strategies need a targeted approach, not broad strokes.
What to do: Build pricing models that reflect actual cost pressures in your specific market segments.

Supply chains are permanently more expensive. U.S. logistics costs hit $2.6 trillion (9% of GDP) up $1 trillion since 2019.

What it means: This isn't temporary disruption; it's the new cost structure.
What to do: Evaluate supply chains for edge over competitors, not just cost optimization.

Competitive Dynamics: Where Opportunity Lives

CEO confidence reflects sense of control. While 75% of CEOs feel optimistic about their own companies, fewer than 30% are optimistic about global conditions.

What it means: Leaders focused on what they can control will pull away from those paralyzed by external factors.
What to do: Keep moving forward while competitors hesitate.

AI is separating winners from laggards. Organizations report 14% average ROI from AI programs that moved beyond pilot phases.

What it means: The competitive gap between AI adopters and followers is widening rapidly.
What to do: Scale successful AI pilots now. Waiting until 2026 could mean playing catch-up.

Workforce models are evolving rapidly. Most employers are investing in upskilling, while gig work now adds $1.27 trillion to the economy.

What it means: The way we build teams is shifting.
What to do: Embrace flexible talent models that blend full-time employees with contractors and freelancers.

Strategic Imperatives: Your 2026 Playbook

Running a tight operation becomes an edge over competitors. In slower growth environments, efficiency separates winners from losers.

What to do: Invest in real-time analytics and flexible operating models. Organizations that built agility during 2025's uncertainty now hold clear advantages.

Customer relationships become defensive fortresses. Consumer demand continues softening as economic pressure builds.

What to do: Focus on lifetime value expansion and evolving service models. Consider how extended repurchase cycles create opportunities for new customer touchpoints.

Scenario planning becomes essential. With 74% of leaders affected by policy uncertainty, single-point forecasting is obsolete.

What to do: Model multiple economic outcomes. Organizations that can confidently handle various scenarios will capture market share from less prepared competitors.

Forecast accuracy drives strategic advantage. Many CEOs rank improving prediction capabilities as their top three-year priority.

What to do: Invest in technology that enhances market responsiveness and makes it tougher for competitors to catch up.

The Path Forward

The economic data reveals a clear pattern. Organizations that embrace adaptive capability while maintaining clear goals will succeed. Those that remain solely reactive to outside forces will struggle.

At CMG, we've guided leaders through multiple economic cycles using frameworks specifically designed for complex environments:

  • ThriveNumber™ helps organizations become skilled at change itself, a competitive differentiator amid shifting market and competitive realities
  • Road to Revenue identifies growth and profit expansion opportunities even in constrained markets
  • Our organizational agility approach creates sustainable performance regardless of economic conditions

The choice is clear: transform to gain a competitive edge amid economic complexity or watch more agile players pull ahead.

As over 60% of business leaders proceed with unchanged strategic plans or delay further strategy development into 2026, there is a window for bold, well-considered actions to unlock revenue, profit, and market share advantages. The organizations that combine clear-eyed economic assessment with decisive strategic moves will emerge stronger and more resilient well into the future.

Ready to turn uncertainty into momentum? Let's explore how to power your Q4 performance and get a running start into 2026.