Writer: Mariana Hernández Sevilla
October 2024 — Executives from different sectors in the Northern markets, covered by Capital Analytics’ annual business reviews, gave an overall positive view for the third quarter ended this September.
Based on the latest Capital Analytics Business Sentiment Survey (CABS), 75% of respondents viewed their regional economy positively in 3Q24, a 13% increase from the previous quarter. Meanwhile, the remaining 25% maintained neutral. In comparison to the 2Q24, where 3% had a negative outlook for the northern markets, this quarter no leaders had a negative stance.
“Our rate of delinquent loans remains extraordinarily low, our foreclosure activity is nonexistent, and the industry as a whole is benefiting from growth across multiple sectors,” a financial executive based in the Northeast region told Capital Analytics.
Recent data from the Federal Reserve’s FOMC statement echoed CABS survey results. The economy continues to grow at a steady rate, though job growth has slowed and unemployment has risen slightly but remains low. Inflation is progressing towards the 2% target but remains elevated. In response, the Federal Reserve lowered the federal funds rate by 0.5% to 4.75-5%, while continuing to reduce its holdings of securities.
Respondents in the CABS rated their sentiment on a scale of 1 to 5 (5 being the highest), with the average score among all respondents rising to 3.86 out of 5. This marks a slight improvement from the 3.7 average score in 2Q24.
Business leaders also expressed a positive trajectory in their organization’s performance: 88% of the surveyed business leaders saw a strong internal performance over the past six months. This is up 18% year over year, with 76% of those surveyed responding favorably in 3Q23.
“The phrase we use in our marketing is “Let’s get to work,” because we all work very hard to ensure the curriculum is rich and that workforce development initiatives connect with the needs of our students and the workforce,” a Massachusetts-based college president told Capital Analytics.
The labor market remains a focal point, with 75% of decision-makers planning to hire more workers, a 3% increase from 2Q24. This suggests that businesses recognize the need to expand the workforce in the region and are addressing challenges within the education system by investing in the skills required for the modern era.
“While degrees will still be important, the workforce is evolving, and we need to align with what the industry demands and where new technologies are heading.” the education expert told Capital Analytics. “AI and other technologies will affect jobs in the future. Some jobs will likely be displaced, and people will need to be reskilled to reenter the workforce.”
More than four in five (81%) of business leaders responded that demand for their products and services were strong over the past six months, dipping by 5% from 2Q24. Businesses look to maintain effective management and strategic planning to keep up with the high demand as well as maintain the relationship with clients.
“We continue to adapt to our clients’ needs and are committed to evolving as technology advances,” a banking leader told Capital Analytics.
Respondents rated the local government policies and initiatives supporting the growth and success of businesses in the region, with 53% expressing support, 27% neutral, and 20% identifying room for improvement. The overall score was 3.55 out of 5, an improvement from 3.24 in 2Q24.
For more CABS reports, click here.
