At our most recent CEO Growth Talks, I spoke with Taylor St. Germaine, Senior Economist at ITR Economics. The timing couldn’t have been better — the latest GDP numbers had just been released, and Taylor broke down what they mean for CEOs planning growth.
As always, ITR brought a clear and fact-based perspective. The economy is growing. Consumer spending is strong. And while some industries are facing headwinds, opportunities abound for leaders who are ready to act.
But the real question for CEOs isn’t just what the economy looks like. It’s: how do you prepare your business to grow in this environment — and the one coming next?
What the Economy Is Telling Us
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GDP surprised to the upside. Growth came in at 3%, well above expectations. Taylor reminded us: “The stock market is not the economy, folks. GDP and the S&P are completely different things.”
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Consumers are buying even if they don’t feel confident. Retail sales are rising faster than inflation, showing true demand.
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Services and high-tech manufacturing are bright spots. Sectors like semiconductors and electronics are benefiting from onshoring and technology demand.
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Some industries face headwinds. Automotive is tightly linked to consumer confidence, while commercial construction (office and retail in particular) is soft.
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The future brings both opportunity and pressure. Labor shortages will push costs up 28% in five years, tariffs are inflationary, and ITR still forecasts a major downturn in the 2030s
What CEOs Should Do About It
Economic data is useful, but only if it shapes the way leaders act. Here are several ways CEOs can translate today’s trends into tomorrow’s growth strategy:
1. Keep investing in growth
With strong consumer demand, now is not the time to freeze. Growth strategies should reflect customer behavior — not short-term market sentiment.
2. Align messaging with the moment
Customers are still spending, but many don’t feel confident. Sales and marketing must speak to that tension: reassuring buyers, showing value, and acknowledging uncertainty without fueling it.
3. Diversify toward faster-growing markets
Service offerings and high-tech sectors are expanding. Leaders in slower-growth industries should be thinking about adjacencies, partnerships, or repositioning strategies that help capture some of that momentum.
4. Prepare to compete harder in challenged sectors
In markets like automotive or commercial construction, the fight will be for share, not category growth. That means sharpening differentiation, doubling down on retention, and looking for efficiency gains.
5. Invest in efficiency before the labor crunch deepens
Rising wages and tight labor pools will require smarter use of technology, automation, and AI. Right now, AI is boosting human efficiency more than replacing jobs — and companies that harness that efficiency will be better positioned.
6. Protect margins in an inflationary environment
With costs rising, profitability depends on disciplined pricing, product mix, and customer loyalty. Leaders should be thinking as much about “how we make money” as “how we grow revenue.”
7. Use today’s growth to prepare for tomorrow’s downturn
The 2030s may feel far off, but downturns are easier to navigate when you’ve built reserves, strengthened customer relationships, and invested in scalable systems. As Taylor put it: “Downturns can be the most profitable phases of the business cycle if you’re ready.
The CEO Takeaway
The message from ITR Economics is clear: the economy is strong, but it’s evolving. Growth opportunities are real, but so are cost pressures, industry imbalances, and long-term risks.
For CEOs, this means leading with both optimism and discipline. Invest where customers are buying. Diversify where growth is happening. Defend your margins. And build resilience now, while the tide is in your favor.
The next few years represent a rare window to grow. The leaders who use it wisely will be the ones best positioned when the cycle inevitably turns.
Watch the full video below:
