In the second quarter of 2025, PNC Corporate & Institutional Banking conducted a survey among 2,000 clients, with the goal of gauging business outlook regarding the economy, investment plans, hiring expectations, and prices over the next six months. What emerged from the results was an overarching sentiment of cautious optimism amid uncertainty.

Survey results showed that, while outright pessimism is limited, businesses are clearly in a holding pattern as they await greater clarity on trade policy, interest rates, and the broader macroeconomic environment before committing to aggressive expansion. Strategic focus on resilience, efficiency, and talent remains paramount while navigating the shifting tides of 2025. 

“What we are hearing from clients is that in the next six months, they are likely to continue to try to adapt as they balance near-term caution with the need to remain agile and responsive to any new opportunities that emerge from an evolving economic and policy landscape,” said Mike Thomas, head of PNC Corporate and Institutional Banking. “Themes such as tariffs, capital strategy, pricing, and labor are very much top of mind for most businesses.”

Here are some key takeaways from survey feedback:

Overall Economic Sentiment: What Is Your Outlook for the Overall U.S. Economy Over the Next Six Months?

In response to this question, the majority of businesses indicated a sense of guarded neutrality. They are essentially betting on continued slow economic growth with downside risks, including preparing for a challenging second half of 2025 – but they aren’t panicking.

  • Prevailing uncertainty around federal policy is the primary driver behind this view, as businesses contend with the effects of U.S. tariff changes and trade negotiations. There are also concerns that higher interest rates, along with ongoing elevated inflation stemming from supply constraints, could temper economic growth.
  • Manufacturers and wholesale trade businesses had the most pessimistic view among surveyed businesses, citing tariff impacts and supply chain issues as a likely drag on growth. Technology and professional services businesses, on the other hand, showed the most optimism about the near-term future, with some tech firms less affected by tariffs and benefitting from domestic demand.
  • There were no stark regional divergences in client feedback with businesses in the Northeast, Midwest, South, and West all generally sharing a neutral-to-slightly-negative outlook. 

Capital Investment Plans: What is Your Outlook for Capital Investments Over the Next Six Months?

Most companies are not planning major changes to their capital expenditure plans in the near term, anticipating investments will remain flat. This indicates that, despite economic worries, respondents overall are continuing to invest in their businesses, albeit carefully. Survey responses suggest that many companies have healthy balance sheets or access to capital and can sustain existing investment levels, and when investing they are prioritizing projects with a clear return on investment or strategic necessity.

  • Businesses are generally continuing with essential or ongoing investments but pausing on new large-scale projects until uncertainty abates.
  • Selective increases indicated among a quarter of respondents tended to be from companies in sectors with strong demand or specific growth opportunities (such as tech firms scaling up data centers), those taking strategic action ahead of anticipated changes (for example, building up inventory ahead of tariffs), or those located in regions with supportive factors.
  • Across all geographic regions, the prevailing themes were risk mitigation, operational efficiency, and selective capital deployment.
  • Increases in capital investments were most commonly cited among businesses in industries that benefit from government contracts, infrastructure buildouts, and resilient consumer or demographic trends, while reductions were closely linked to sectors exposed to international trade volatility, tariffs, or where labor and materials costs have spiked unpredictably.

Industry Employment Outlook: What Is Your Outlook for Employment in Your Industry in the Next Six Months?

Overall, the job market among surveyed businesses is stable. Companies are neither gearing up major expansions, nor executing broad layoffs. Where they need to hire for growth or backfilling, they often face a shallow labor pool. Where they need to cut costs, they are trying to do so without eroding their workforce too much.

While all regions indicated a prudent, stability-focused approach to employment, regional distinctions arose from local economic drivers, industry mix, and labor market dynamics:

  • Companies in the Midwest appear to be facing more acute labor shortages, particularly in skilled roles.
  • The South and West are seeing pockets of growth tied to infrastructure and innovation.
  •  Companies in the Northeast seem to be especially cautious amidst policy uncertainty. Where reductions are expected, they are small and linked to attrition or strategic management rather than layoffs.
  •  Nationally, companies are generally well positioned to adapt quickly, but they show little appetite for risk until greater clarity emerges in the broader environment.

Industry Pricing Outlook: What Is Your Outlook for Prices Within Your Industry Over the Next Six Months?

The overwhelming sentiment among surveyed clients is one of cautious acceptance of cost pressures, coupled with proactive planning to mitigate their impact. Minimal price increases are viewed as the new baseline, with large increases anticipated if trade tensions mount or inflation accelerates further. Many organizations are adapting by focusing on a combination of operational efficiency, supply chain resilience, stockpiling inventory, hedging against further price escalation, or seeking alternative suppliers and discovering ways to maintain customer relationships in the face of higher costs. 

Contributors cited several drivers for anticipated price hikes, including:

  • Tariffs and ongoing trade policy uncertainty—particularly affecting goods sourced from China, Mexico, and Canada.
  • Volatility or upward pressure in input costs, including raw materials, freight, and labor.
  • Passing through higher costs to end consumers amid supply chain adjustments.
  • Inflationary trends and expectations for continued or renewed cost pressures.
  • Contract renewals and renegotiations reflecting elevated cost bases. 

Despite these challenges, some respondents viewed price increases as manageable or even beneficial to margins—especially if competitors are affected similarly and can pass costs along in tandem. The ability to pass on costs to customers, the pace of policy resolution, and shifts in supply chain dynamics will shape how these pricing trends evolve through the remainder of the year. 

Survey Results: PNC C&IB Client Sentiment Survey 2Q25

Survey Methodology

PNC Relationship Managers surveyed 2,000 Corporate & Institutional Banking clients for a pulse check on their sentiments (“Client Sentiment Survey 2Q25”) regarding the current economic conditions by asking decision makers (i.e. CEOs, CFOs, Treasurers, Controllers, Executive Management Teams, etc.) the following questions: 

  • What is your outlook for the overall U.S. economy over the next 6 months?
  • What is your outlook for capital investments over the next 6 months?           
  • What is your outlook for employment within your industry over the next 6 months?
  • What is your outlook for prices within your industry over the next 6 months?

2Q25 survey data was collected May 1-27, 2025, from companies throughout PNC’s nationwide footprint. Surveyed businesses represented a range of industries, including manufacturing (482); wholesale trade (317); real estate and rental leasing (208); professional, scientific, and technical services (185); construction (189); health care and social assistance (116); transportation and warehousing (97); retail trade (91); and other industries (less than 5% of surveyed participants).

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