5 outlooks on market volatility for executives to consider

John Epperson, Tony Klaich, John Kurkowski, Andrea M. Meinardi

See how leaders from different industries are adapting to rising uncertainty in the market.

Market volatility during the past few years compelled leaders across industries to take a fundamentally different view on how they do business. Specific areas they’ve had to rethink and adjust include:

Business models
Niche service areas
Differentiated offerings
Consumer dynamics

Crowe specialists across a variety of industries recently discussed these and other insights in a webinar based on the inaugural Crowe Executive Outlook Study, recently launched in collaboration with Forbes.

Find out what these specialists had to say about how businesses are using uncertainty to their advantage – plus, see the polling results from executives across these categories that show how they believe market volatility will impact their enterprises.

1. Leading source of volatility

What is the leading source of volatility facing your business today?

Economic change (inflation, recession): 38.3%*
Financial risk (revenue, profitability, access to capital): 28.6%
Talent: 21.7%
Regulations: 9.2%
Other: 2.3%

392 votes

As with many other industries, the banking and financial services space faces issues that might not have been solely caused by the pandemic but were exacerbated by them. These issues can range from inflationary conditions to talent challenges. One example specific to this industry is responding to the increasing demand for digital capabilities along with the decreasing demand for a large geographic footprint of brick-and-mortar locations. These and other transformation efforts within financial services companies are largely in the service of one goal – staying relevant to customers as expectations and habits change over time.

2. How businesses view volatility

How strongly do you agree or disagree that your organization generally views market volatility as an opportunity?

Strongly agree: 15.0%
Somewhat agree: 38.6%
Neither agree nor disagree: 22.7%
Somewhat disagree: 19.3%
Strongly disagree: 4.3%

414 votes

Viewing market volatility as an opportunity can depend on how volatility is defined in a given sector. For instance, the Crowe Executive Outlook Study showed a mixed reaction to volatility among manufacturing leaders. But manufacturing companies frequently are in a state of flux because of supply chain issues, process innovations, market shifts, and other factors – and that can be true no matter how the economy is performing at a macro level. Conditions that might be recognized as volatile in some industries might be considered business as usual in others.

3. Views on business transformation

How likely is it that your organization will undertake a significant business transformation initiative in the next 12 months?

Very likely: 21.0%
Somewhat likely: 31.9%
Neither likely nor unlikely: 8.7%
Somewhat unlikely: 18.1%
Very unlikely: 15.0%
Unsure/don’t know: 5.3%

414 votes

The technology, media, and telecommunications (TMT) sector recently experienced a slowdown in growth mirroring that of the economy. The upside is that TMT companies now can focus on transformation initiatives, which are gearing up more as the pressures of white-hot growth cool off somewhat. This in turn produces benefits in operational efficiency and automation, customer relationship management, supply chain optimization, and more areas.

4. Deal making and planning

How likely is it that your organization will either be acquired or make a significant acquisition?

Very likely: 14.6%
Somewhat likely: 21.2%
Neither likely nor unlikely: 12.6%
Somewhat unlikely: 11.9%
Very unlikely: 31.9%
Unsure/don't know: 7.9%

405 votes

Despite continued concerns about the potential for a recession, private equity groups are gearing up for a potentially hot deals market. Sell-side diligence work, which is performed prior to a company going to market, has increased considerably since April. With interest rates starting to plateau, lenders reengaging with the market, and approximately $800 billion in total investment capital, the private equity space is feeling confident about finding opportunities ahead.

5. Technology investments

What is your company's expected level of technology investment this fiscal year?

More than 25% lower: 7.9%
1%-25% lower: 21.0%
Equal: 26.6%
1%-25% higher: 36.8%
More than 25% higher: 7.7%

391 votes

Interestingly, more than 70% of poll respondents predicted their company’s technology investment would not decrease this year. This is largely because businesses understand how digital transformation can reduce costs and drive efficiency in all kinds of ways. The issue isn’t whether transformation can have a positive impact on their bottom lines – it’s where it can have the biggest impact, and that probably will depend on what industry you’re in. In manufacturing, it could be inventory management. In financial services, it could be platform integrations or customer relationship management. Everyone’s transformation journey will be different, but it will be a necessary part of future growth for all.

* All event surveys featured here garnered 390+ responses. Poll results are not scientific, and totals might not equal 100 percent due to rounding.

Trying to figure out where to find value in market volatility?

Crowe can help you uncover opportunities in uncertainty, from regulatory shifts to digital disruption. Reach out to tell us more about the issues you’re dealing with – and to find out how our industry specialists can help you move forward.

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