Business Planning for 2025: 5 Economic Trends to Watch

 

Staying informed about economic trends can help you make strategic decisions and minimize risk within your business. On February 21, 2025, Christopher Thornburg of Beacon Economics presented an economic status update at Swinomish Casino, shedding light on key trends shaping the business landscape. 

While media headlines often paint a picture of economic uncertainty, Thornburg emphasized the importance of separating social narrative—what people think is happening—from economic reality—what data actually shows.  

Members of the VSH team were in attendance of Thornburg’s presentation and put together the following highlights. Here’s a recap of the key insights and what they mean for your business. 

Economic Growth in Washington State 

• Washington State has experienced consistent economic expansion, with spending increasing in nine of the last ten years. The only exception was during the onset of the pandemic. 

• The state’s GDP has outpaced the national average for the past five years, demonstrating strong economic fundamentals. 

Planning Opportunity: Plan for Long-Term Growth – With Washington’s economy continuing to outpace national trends, businesses that focus on efficiency, innovation, and expansion may strengthen their position for future opportunities. 

Labor Market Trends 

• Despite concerns over an economic future, labor markets remain stable. Layoff rates have increased since the pandemic but are still lower than pre-pandemic levels. 

• Earnings have risen, and poverty rates have declined, indicating financial improvements for many households. 

• Job openings have cooled but remain at levels greater than pre-pandemic. Industries with the most opportunities statewide include education, healthcare, and government, while in Skagit County, administrative support, education, and manufacturing lead job growth. 

Planning Opportunity: Leverage a Strong Labor Market – With job openings still at or above pre-pandemic levels, now is the time to focus on employee retention and strategic hiring. 

Manufacturing and Housing in Skagit County 

• Skagit County has seen a significant rise in manufacturing jobs, exceeding statewide growth in the sector. 

• The local housing market faces a supply shortage, with new developments primarily focused on multi-family units. This presents challenges for homeownership in single family developments, but opportunities for real estate investors. 

Planning Opportunity: Adapt to Housing Market Shifts – The demand for multi-family housing presents opportunities for developers, investors, and businesses catering to renters. 

Understanding Inflation 

• Inflation continues to be a concern, driven by an increase in the money supply and strong demand for services. 

• While inflation has moderated from pandemic-era highs, businesses should remain mindful of pricing strategies, supply chain costs, and interest rate impacts on borrowing. 

Planning Opportunity: Monitor Inflation and Interest Rates – Rising costs can squeeze profit margins. Consider strategies like adjusting pricing, negotiating supplier contracts, and reviewing financing options. 

The Disconnect Between Perception and Reality 

Despite positive economic indicators, national sentiment has become increasingly pessimistic. People often expect a recession even when data doesn’t support that view. The disconnect between perception and reality can influence consumer behavior and business decision-making. 

Planning Opportunity: Stay Data-Driven – Avoid making financial or operational decisions based on fear-driven headlines. Instead, rely on actual economic data and industry-specific trends. 

Economic uncertainty can be unsettling, but informed decision-making is the best way to navigate challenges and seize opportunities. If you have questions about how these trends affect your business, our team is here to help. Reach out to us to discuss tax strategies, financial planning, and business growth solutions tailored to your needs. 

Disclosure: This article provides general information and should not be considered tax or accounting advice. Every situation is unique, so be sure to consult a qualified CPA who understands your specific circumstances before making any financial decisions.