March 2025
For the first time since March 2022, surveyed executives foresee geopolitical instability as the top risk to companies’ growth over the next 12 months. In the latest McKinsey Global Survey on economic conditions, weak demand—which was the most-cited risk in the previous three quarters—is now the second-most-cited disruption, followed closely by changes in the trade environment and trade relationships.1
While private sector respondents remain more likely to expect improvement than they are to expect decreasing profits and demand, the shares expecting increasing profits and demand are the smallest in years. At the same time, responses suggest that both workforce sizes and prices are stabilizing. Just 41 percent of respondents say their companies have raised prices for their products or services in the past six months, the smallest share since we began asking that question, in September 2022.
Workforce size: Nearly half of respondents (46 percent) expect no change in their companies’ workforce sizes in the next six months. Overall, respondents are just as likely to predict decreasing head count as they are increasing head count. However, the share of respondents expecting their companies’ workforces to grow (28 percent) is the smallest since the June 2020 survey. In every sector, expectations for growth are less common now than in last quarter’s survey.
Profits: More than half of respondents—55 percent—expect profits to increase in the next six months, though that is the smallest share since September 2022. While profit expectations among respondents working in consumer goods and retail and in energy and materials have remained consistently upbeat since September 2024, respondents in business, legal, and professional services are less likely than they were at the end of 2024 to expect profit increases.
Demand: Forty-six percent of respondents expect an increase in demand for their companies’ products or services in the next six months, the smallest share since June 2020. However, respondents are 2.4 times more likely to expect increasing demand than they are to expect decreasing demand. In a change from the previous two quarters, respondents working in consumer goods and retail are now more pessimistic than those in other industries.
