As 2024 comes to a close, it’s time for me to review my predictions from last year and predict twelve more trends for 2025. Just like last year, I will avoid predicting where the stock market will be at the end of 2025; instead, I will stick to identifying trends that supply houses will find important in the upcoming year. With all of that, let's jump in and review my 2024 predictions.

1. On-shoring: Commercial construction related to the on-shoring of manufacturing, warehousing, and infrastructure projects will be the primary driver of revenue growth for wholesale distributors in 2024.
   • Verdict: Mostly True. Commercial construction related to on-shoring has remained a strong revenue driver for distributors, especially in manufacturing and warehousing. Infrastructure project growth, however, has been slower than expected in some geographies.
2. Growth in 2024: The overall M&A deal flow in the U.S. and globally is expected to continue at a stable and steady pace throughout 2024. There's an anticipation of moderate growth in global deal volume, especially with early-stage deal activity showing positive trends.
   • Verdict: True. Global M&A activity has remained consistent, with a modest growth of deal volumes, particularly in early-stage deals, aligned with positive trends.
3. Deal Flow: The high-interest-rate environment is leading to a trend where acquirers are focusing more on smaller-scale deals. These deals present reduced financial risk and align with a more cautious approach to risk management.
   • Verdict: True. High interest rates have indeed made the focus shift towards smaller-scale deals. The reason is that such transactions minimize financial risk and are in line with cautious investment strategies.
4. Digital Transformation: The digital transformation revolution is expected to accelerate, driving M&A activities, particularly in technology, energy, healthcare, life sciences, and smart manufacturing sectors. Companies are increasingly integrating digital capabilities to stay competitive and maintain a strategic advantage.
   • Verdict: True. Digital transformation keeps on driving M&A activities, especially in industries such as energy, healthcare, and smart manufacturing, where companies seek to emphasize digital capabilities for competitiveness.
5. Middle East: In 2024, the larger problem will be the continued effects of the Israel/Hamas war that will cause disruption across the region.
   • Verdict: True. The Israel-Hamas War has created significant regional disruptions, as expected, that have hurt trade and investment sentiment in the Middle East.
6. Inflation: Inflation subsides to under 3%; interest rates see rapid cuts in the run-up to the election. Interest rates will see multiple cuts from the FED in 2024.
   • Verdict: Mostly False. Inflation has stayed above 3% for most of 2024, and the Federal Reserve has cut rates but not drastically.
7. Economy: Recession will be avoided with a soft landing in 2024 with motivations from both sides of the political parties. Moreover, companies have utilized software to reduce inefficiency and improve profitability in 2023 and now have to focus on organic, non-inflationary growth in 2024 which will lead to a soft landing and an absence of recession in 2024.
   • Verdict: True. The U.S. did not enter a recession in 2024. Indicators are the economy has landed softly. Organic growth is mixed, though, with some companies still battling through post-pandemic headwinds.
8. US Politics: Trump will be the Republican party nominee and Gavin Newsom is going to be the Democratic Party nominee.
   • Verdict: Mostly True. Trump was the Republican nominee. However, Gavin Newsom did not emerge as the Democratic nominee, with Kamala Harris on the ticket. But at the time it was a bold take considering President Biden was suggesting that he had full intentions of running in 2024.

2025 Predictions

1. Economic Boom
   • The US will experience near double-digit growth with pro-business policies, leading to a stock market boom and a surge in new residential and commercial permits, thus a positive outlook for the industrial distribution market.
2. US Leads/Moderate Global Growth
   • Global GDP growth will stabilize, with Asia continuing to lead in manufacturing and supply, while Europe lags behind due to energy challenges and immigration issues.
   • The US will lead the world in economic growth with a very promising future, less regulation, and plans to revitalize the economy from the stacked government.
3. Global Supply Chains
   • Resilience strategies will continue to regionalize supply chains, with a focus on "friendshoring" to mitigate geopolitical risks.
4. AI Governance
   • The US will propose the first draft framework for regulating AI, setting the stage for future developments.
   • AI’s predictive capabilities will expand across sectors like healthcare, manufacturing, industrial distribution, etc.
5. Education Policy Shifts
   • Although the threat of elimination of the Department of Education has been discussed, this will not occur. It may be reduced.
   • Expanded funding for vocational training and STEM programs will gain traction to address skill gaps.
   • A movement to revitalize and educate America’s workforce will emerge as undocumented workers are deported and more Americans are encouraged to re-enter the job market.
6. Ukraine War Ends
   • Ukraine concedes to Russia, with Crimea becoming a key prize within Trump’s first 100 days in office.
7. AI-Powered Industries
   • Nuclear will make a comeback as the need for clean alternative energy becomes a focus for the electrification of the country.
8. Interest Rate Plateau
   • After inflation moderates, the Federal Reserve is likely to maintain steady interest rates, creating a stable borrowing environment.
9. Energy Markets
   • Oil demand will peak, but the US will pump (per Trump), thus keeping oil relatively stable.
   • Renewable energy investments will outpace fossil fuels, driving the next phase of the energy transition.
10. Real Estate Rebound
    • U.S. commercial real estate may recover in key urban hubs as hybrid work stabilizes and demand for logistics infrastructure grows.
    • Return to work will have a money multiplier effect, with cities making a shift in their policing policy.
11. Cryptocurrency Deregulation
    • Clearer U.S. regulations will increase institutional investment in cryptocurrencies, stabilizing the market.
    • Crypto will be up 25%. At the time of this article, Bitcoin is trading at $100,000 and XRP is trading at $2.30.
12. Distribution Company
    • At least one top-tier U.S. plumbing wholesaler (top 15 by revenue) will be acquired by or enter into a major merger with a larger building supply conglomerate.