Confidence in the US economy jumps as companies anticipate stronger demand

Sentiment among commercial businesses in the US has reached its highest level in four years following the 2024 presidential election, according to Wells Fargo’s Q4 Commercial Business Sentiment Report.
The survey, conducted with Barlow Research Associates, found that the commercial sentiment index jumped to 112.9, up from 102.3 in the previous quarter, as business owners expressed renewed optimism about the economy and their own operations.
Conducted between November 15 and November 22, 2024, it polled 307 commercial companies with annual revenues between $10 million and $500 million. Respondents reported a more positive economic outlook, increased demand for goods and services, and a greater sense of stability with the election outcome settled.
“The highly positive commercial sentiment recorded in Q4 was likely driven by the elimination of election unknowns, which typically delay business decisions and tend to raise concern,” said Mary Katherine Dubose, head of specialized industries for Wells Fargo Commercial Banking.
Dubose noted that the only time the index reached a comparable level (111.7) was in Q2 2021, after the rollout of the COVID-19 vaccine when businesses saw a clearer path forward.
The report found that 51% of companies expect the US economy to improve over the next 12 months, a sharp increase from 22% in Q3, while 63% expect an improved economy over the next five years, up from 44% in the previous quarter.
Companies also expressed confidence in their own business prospects heading into 2025. Forty-three per cent (43%) of respondents expect their businesses to improve in the next year, while only 6% anticipate worsening conditions. Demand for goods and services is also on the rise, with 36% predicting an increase, while just 4% foresee a decline.
Businesses cited several factors contributing to improved conditions. Thirty-five per cent (35%) credited efficiency improvements, while 29% pointed to a growing customer base. Lower fuel costs and stabilizing interest rates were also noted as key drivers of growth.
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Despite the optimism, companies remain cautious about ongoing inflationary pressures and rising costs. Fifty-seven per cent (57%) identified inflation as their biggest challenge, while 70% cited increased prices as a top concern. Additionally, 49% worried about reduced demand for goods and services, and 46% pointed to hiring and retention challenges.
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