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“It’s not about predicting the future perfectly; it’s about being ready for a range of futures."
more holistic approach to workforce planning,” including offering training opportunities and tapping into underserved talent pools.
Capital Spending and Investment Outlook
On the investment side, conditions are mixed. EY’s outlook points to a rise in strategic capital expenditures by larger firms, especially in energy transition, digital infrastructure, and supply chain automation. However, for smaller operators, the cost of capital remains a limiting factor.
While interest rates may have peaked, Deloitte notes that long-term rates remain elevated. “Although the overall [federal budget] bill is expansionary... it offers only limited upside next year relative to the government’s tax and fiscal stance this year,” the firm writes. For manufacturers contemplating equipment purchases or facility upgrades, this means being selective and cost-conscious in their planning.
At the same time, McKinsey points out that many small and mid-sized businesses have stronger balance sheets than expected, in part due to conservative fiscal management and pandemic-era savings. For those in a position to invest, areas such as preventive maintenance, digital order management,
and worker retention tools may offer the best return.
A Volatile but Manageable Path Forward
Each of the three reports emphasizes that uncertainty remains a core theme in 2H 2025, whether driven by U.S. elections, global conflicts, or shifting regulatory pri- orities. Still, none forecast a sharp eco- nomic downturn. Deloitte's baseline scenario anticipates steady, if modest, growth—supported by consumer resilience and ongoing, albeit fragile, global supply chain recovery.
McKinsey, in particular, cautions against overreacting to short-term volatility. “Com- panies that thrive tend to be those that can pivot quickly, build flexible supply chains, and communicate transparently with employees and partners,” the firm advises.
In a similar vein, EY emphasizes that many companies are doubling down on resilience strategies. These include securing local suppliers, building stronger HR policies, and investing in technology to monitor and improve operations. These are pragmatic steps that small and mid-sized manufacturers—such as those in the pallet sector—can take without overextending resources.
Above all, the second half of 2025 looks to be a time for disciplined execution rather than big gambles. As McKinsey puts it, “It’s not about predicting the future perfectly; it’s about being ready for a range of futures.”
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36 WESTERN PALLET