The current business landscape looks very different than it did at the start of the year — and leaders are finding that the key to staying competitive is the ability to adapt. At the start of 2025, more than 200 North American leaders shared their outlooks on business resiliency in HLB’s Survey of Business Leaders. The data painted a picture of cautious optimism: while executives anticipated continued economic headwinds, most expected growth to remain stable or improve. Cost control, talent retention and digital transformation topped the agenda, driven by global uncertainty and evolving competitive pressures.

Now, months later, the business environment has shifted, causing stark changes in executive sentiment and their strategies. One thing remains the same, though: the key to survival is adaptability. 

ADAPTABILITY TO OVERCOME ECONOMIC UNCERTAINTY

Back in January, 62% of HLB respondents in North America expected 2025 to bring stable or improved growth. A Chief Executive survey from July 2025 showed, in general, CEOs remained optimistic months later. Results from over 200 Chief Executive survey participants illustrated that CEOs are forecasting a 13% improvement in business conditions by this time next year. And when asked to judge current conditions, business executives were hopeful. 

While the monthly Chief Executive survey revealed CEOs’ hesitations about economic conditions in March and April as tariff talk unfurled, once June and July came around, CEOs began to rate business conditions more favorably. 

A Conference Board survey of U.S. chief executives conducted in late July showed an improvement in CEO confidence (with 49% of respondents feeling confident) — whereas, previously in the second quarter of the year, confidence had been only at 34%. 

The takeaways from the HLB Business Leaders Survey remain the same months later: adaptability is no longer a nice-to-have for businesses. Month over month, executives are reporting significantly different expectations and outlooks on business conditions. Knowing that economic conditions will only continue to fluctuate means businesses must be nimble if they want to be successful. 

COST PRESSURES REMAIN COMPLEX

At the time of the HLB survey, 44% of North American executives identified operational costs as their primary concern, with rising interest rates a close second at 40%. 

Today, cost pressures have continued to concern leaders, despite generally optimistic outlooks on the year ahead. The Federal Reserve has held firm against lowering the federal funds rate — keeping it more expensive to finance business growth. Plus, tariff policies going into effect will have leaders looking at how much inventory and supplies may actually cost this year and beyond. 

These factors have dampened some CEO’s outlook compared to the time of the HLB survey. According to the Business Roundtable's CEO Economic Outlook Index conducted in June 2025, confidence was at a five-year low. That same survey revealed executives’ plans for capital investment and expectations for sales both decreased, as well. However, that survey did not take into account the new tax legislation, which passed a few weeks after survey data was collected. 

TAX REFORM OFFERS OPPORTUNITIES

From the full expensing of U.S. Research or Experimental expenditures and restoring EBITDA on a permanent basis, to bringing back 100% bonus depreciation, the One Big Beautiful Bill Act (OBBBA) included many business-friendly tax provisions. A recent Financial Advisor article stated that companies are responding positively to the new tax law and called it a “boost to spending power.” 

Ultimately, this legislation being passed provides certainty to the tax law for the foreseeable future and allows business leaders to devise a plan, at minimum.

AI INITIATIVES SURGE

At the time of the HLB Business Leaders Survey, many CEOs were hesitant to implement AI solutions without solid use cases to draw from; but in data collected by Gartner from March to May of 2025*, 62% of respondents cited AI as one of the biggest factor in remaining competitive over the next decade. Gartner’s study of senior leaders highlighted that AI-related infrastructures are immune from most cost cutting. In fact, spending on data center systems and other AI functions is increasing and marks a very clear shift in executive priorities. 

The HLB survey also revealed that earlier this year 82% of respondents indicated plans to increase or maintain investments in technology. The recent findings from Gartner showed that chief information officers were reporting a pause in net-new spending in IT due to current economic uncertainties, with the exception of AI. Leaders are cautious in committing funds, especially for IT hardware and infrastructure, despite having budgets in place. 

STRATEGIC INVESTMENTS IN TALENT BUT NOT WITHOUT LAYOFFS

Forty-seven percent of North American executives in the HLB survey responded with plans to invest more in talent development and retention even amid cost pressures and uncertainty at the start of the year. Months later, a Chief Executive survey echoed this sentiment. The survey of more than 200 U.S. CEOs in early July asked participants what changes they forecasted for their companies over the next 12 months, compared to the previous 12 months. The results showed 42% of executives responding with their plans to increase hiring efforts, and only 18% planning to decrease efforts.

However, hiring trends do not necessarily correlate to trends in layoffs. The Business Roundtable's CEO Economic Outlook Index, in fact, reported an increase in the amount of CEOs planning to shrink their existing workforces in the second half of 2025; from almost 30% at the beginning of the year to over 40%. Some major companies have already begun layoffs, including Intel, Meta, Microsoft, BlackRock and UPS.

RESILIENCE THROUGH CHANGE

HLB's 2025 survey captured a cautious but optimistic snapshot in time. Since then, policy has shifted, and the market has remained volatile. Yet, clarity may be on the horizon as uncertainty around tax policy, tariffs and interest rates begins to settle. 

Throughout these seasons of economic and geopolitical turmoil, the companies that stay open to change and thinking on their feet will be well-positioned for growth and stability regardless of external forces.

GHJ helps clients across industries build resilient, future-ready businesses. Contact the team here.

*Note that the Gartner study includes feedback from both North American and Western European senior leaders.