With new records on the horizon, now is the right time to prepare your private equity firm and portfolio companies for growth. In this video, Taylor St. Germain, an economist from ITR Economics, a Crowe LLP subsidiary, provides a forecast and outlook for 2025-2026, with a focus on key indicators like gross domestic product (GDP), inflation, interest rates, and M&A activity. He covers what private equity firms need to know moving into 2025, including:
- The U.S. GDP is projected to continue growing and set new records each quarter in 2025 and 2026, though at a slower pace than recent years.
- The industrial economy is forecasted to rebound in 2025-2026, driven by lower interest rates.
- Inflation is expected to keep slowing in 2024-2025, allowing for lower interest rates that should stimulate economic activity. However, inflation pressures might build again in 2026.
- Leading indicators point to an uptick in M&A activity in the coming months and years after a recent lull.
Overall, the outlook suggests private equity firms and their portfolio companies should prepare for growth in 2025-2026, while being mindful of potential inflation risks in the future.
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