The past several years presented nuanced challenges amidst continual market volatility, leaving a lasting impact on what was once “business as usual.” As the dust began to settle in the latter part of 2023, new opportunities emerged. “We are entering a period where business leaders can take a collective deep breath and assess where they stand in anticipation of potential future turbulence. The first quarter of 2024 offers an important moment for businesses to refocus, reevaluate, and create effective plans post years of unrest,” notes Managing Partner of Industries, Mark Fagan.

Across industries, several factors are presenting both obstacles and opportunities that directly impact the ability for companies and their leadership to meet their short-term goals and achieve their long-term objectives.

	Inflation If one issue has proven to be one of the common threads across personal and professional conversations, it is how expensive everything has become. The uncertainty around inflation has created hesitation and doubt when it comes to the decisions business leaders are faced with. However, inflation has eased slightly since October, as noted by the U.S. Bureau of Labor Statistics, revealing signs of slowing price increases emerging under the surface. Though there is still uncertainty around a steady slowdown of inflation in the near future, business leaders can employ effective strategies to help triage its adverse effects, now.
	Interest rates The current market, influenced by inflation changes, has been rocked by rising interest rates. Deal flows and exits have become extremely limited, forcing decision makers and businesses to do a reality check, and oftentimes pivot strategic plans. As investors have become more skittish due to the high rate of borrowing, it has become increasingly difficult to close mergers and acquisitions (M&A) transactions. Navigating this situation and thoughtfully responding to the challenges posed by high interest rates is critical for businesses to assess in preparation for the year ahead. The lasting impact that the relationship between interest rates and inflation will have on the economy is still playing out and businesses should adequately prepare for every possible scenario.
	Uncertainty of the market The banking crisis of 2023 precipitated even greater uncertainty in the market. The combined effect of inflation and interest rates on businesses presented new risk factors to most U.S. business owners and executive leaders. In order to manage market uncertainty, businesses need to be able to quickly make decisions by having access to accurate, real-time data. It is more important than ever to have effective reporting tools in place to help make informed decisions wherever the market turns.
	Technology The need for accurate, easily accessible data to respond to market volatility has never been more paramount. The resulting wave of digital transformation is affecting all industries, products, and services and the technology utilized by companies must be routinely reviewed within the current market in order to ensure accuracy and optimization. “Organizations that report the highest returns from artificial intelligence (AI) are nearly three times more likely than others to report using a variety of capability-building programs to develop technical employees — a strategy effective in mitigating labor challenges,” Fagan states.  To keep pace with the times, it is imperative to reassess systems and processes and consider investing in technology, platforms, and AI that best supports the company’s strategic vision.
	Workforce  Though the healthcare, government, and social assistance sectors all experienced slight job gains, the U.S. Bureau of Labor Statistics shows the overall unemployment rate remains steady at around 3.9 percent and the number of unemployed persons at 6.5 million. Labor shortages have been prevalent across all industries for several years, challenging leaders to thoughtfully consider working environments, benefits, and recruitment and retention strategies to mitigate these challenges. This adaptation comes at a time of low unemployment in the U.S., which requires employers to make unusual compromises and leverage creative solutions in how they incentivize their workforce.
	M&A and other exit strategies Businesses have had to make unprecedented pivots to survive amidst instability. For those unwilling or unable to adapt, they sought a means to join with another company with greater resources or sell in recent years. As the incredible volume of M&A activity has now slowed due to increased market uncertainty, business owners have been challenged to press pause and reevaluate where their businesses currently stand. It is imperative to consider if it is more advantageous to carry on with a business rather than being tempted to sell now as valuation multiples are in decline.

In 2024, Citrin Cooperman will be delivering timely industry insights to help your business effectively address the changes ahead. Helping clients adapt to shifts in the market has always been a key component of Citrin Cooperman’s success. Our unique service lines and industry-focused approach helps businesses rethink antiquated norms and develop innovative strategies that are in-step with the quickly evolving market.

Our data-driven original research and surveys will help guide your business in making important decisions now to help you achieve long-term success tomorrow. Though the road ahead is uncertain, Citrin Cooperman’s team of dedicated professionals has the insights and experience to help your business effectively embrace change.