MHEDA has released its Q3 2025 Economic Advisory Report, prepared by ITR Economics, which reveals the US market continues to be resilient with the consumer spending and business investment components of GDP registering growth in Q1.

Despite this, the report is encouraging MHEDA members to reduce debt levels as much as possible before the end of the decade, “as we anticipate a painful and prolonged recession”.

Members are also being encouraged to “look for ways to diversify into more recession-proof segments or bolster service offerings,” according to the report as a way to mitigate against an ongoing recession.

While some components of GDP grew in Q1, the Bureau of Economic Analysis records overall GDP fell 0.3%, which report authors ITR Economics, says was driven primarily by a surge in imports as businesses and consumers sought to pre-empt future tariff actions. This dynamic subtracts from the GDP.

The report also reveals May data shows accelerating industrial activity and rising retail sales, suggesting continued underlying resilience within the US economy, despite macroeconomic concerns.

“The policy environment remains uncertain, with trade negotiations oscillating between cooperation and friction,” the report continues. “Elevated levels of macroeconomic uncertainty remain, prompting caution among decision-makers and tempering the pace of the current cyclical expansion.

“Nonetheless, our proprietary composite of leading indicators points to a mild upward trajectory for the US economy over the remainder of 2025. That said, recent trends have prompted slight downgrades to several of our key sector-specific outlooks.”

Despite the rebound expected in late 2025 and early 2026, ITR Economics warns “high borrowing costs and our expectation for relatively muted growth in the macroeconomy more broadly suggest New Orders are unlikely to surpass prior highs during this period of rise”.