Business Leaders' Perspectives: Days Before the Election

As the US presidential election approaches, business leaders are weighing in on potential outcomes and their implications for the economy and their industries. PwC's October 2024 Pulse Survey offers insights into executives' expectations and contingency plans. This article explores what business leaders are saying days before the election, focusing on economic growth, industry-specific concerns, and regulatory expectations.

Economic growth expectations vary between a Harris and Trump presidency. According to PwC's survey, 75% of executives agree or strongly agree that a 10% universal tariff on imports (as proposed by Trump) would significantly hinder their growth. Conversely, 75% also agree or strongly agree that they would significantly reduce their domestic investments if there were a US corporate tax rate of 28% (as proposed by Harris). This suggests that business leaders are more concerned about Trump's trade policies and Harris' tax proposals, indicating differing expectations for economic growth under each presidency.
Consumer markets (CM) executives are most optimistic about the election outcomes, with 74% agreeing or strongly agreeing that the outcome could significantly change how they do business. This optimism stems from the potential for regulatory and trade changes to impact their operations. In contrast, financial services (FS) executives are most pessimistic, with 84% agreeing or strongly agreeing that the election outcome will affect their company's business decisions about acquisitions or divestitures. This pessimism is likely due to the uncertainty surrounding monetary policy and regulatory changes.
Business leaders' views on regulation and trade policies vary under different election scenarios. Under a Harris presidency, 36% of consumer markets (CM) leaders rank antitrust and competition as a top-3 policy risk, highlighting their reliance on competitive pricing strategies. Meanwhile, 36% of CM leaders worry about US trade policy under a Trump administration, anticipating changes that may require sourcing materials locally and adapting to new cost dynamics. Energy and utility executives, regardless of the administration, plan to increase investments in technology to enhance operational efficiency and reduce outages. Financial services leaders are cautious about dealmaking due to election uncertainties, with 84% saying the outcome will affect their company's business decisions about acquisitions or divestitures.
Executives across sectors are preparing for potential election outcomes, with 89% of risk executives having contingency plans in place. However, the focus of these plans varies by industry. In heavily regulated sectors like healthcare and financial services, executives are more concerned about regulatory compliance and US economic policy. Tech, media, and telecom executives, on the other hand, are more worried about how the election outcome could significantly change how they do business. Cybersecurity remains a top risk for all sectors, with 75% of executives citing it as a moderate or serious risk.
In conclusion, business leaders are closely monitoring the US election, with varying expectations for economic growth, industry-specific concerns, and regulatory expectations. As the election nears, executives are preparing contingency plans to manage risks and adapt to potential changes. Regardless of the outcome, a balanced approach considering both macroeconomic factors and company-specific fundamentals will be crucial for navigating the post-election landscape.