First, the good news: Partners in North America remain highly confident in their ability to increase revenue, reinvest in their businesses, and adapt to changing conditions. Now, the bad: Confidence in the economic, regulatory, and policy environment fell sharply, and, as a result, the overall PCI declined to its lowest level since the third quarter of 2024.
The four measures outside partners’ control — interest rates, inflation, regulation, and economic policy — account for about 85% of the PCI’s decline. Confidence that inflation will boost business fell into the “critical” range, confidence in interest rates and regulation dropped into “poor” territory, and confidence in economic policy plummeted to its lowest point since the PCI series began.