Collier EBCS: First Quarter 2025 Report
February 03, 2025 / RERI Research Team
Collier County Executive Business Climate Survey First Quarter 2025 Report
Real GDP increased by 2.8 percent in 2024, driven by consumer spending in both goods and services and increases in investment, government spending, and net exports, continuing the growth trend in the last three years and aligned with the long-term growth rate experienced in the US. The nation’s unemployment rate declined from 4.2 percent in October to 4.1 percent in December 2024, staying within the range often considered “full employment” by economists. Consumer Sentiment also continued to rally, rising 3.9 points from September 2024 to 74.0 in December 2024. The National Federation of Independent Business (NFIB) reported steady growth in small business sentiment, with its index reaching 105.1 in December, the highest number in the last 6 years.
On the other hand, inflation increased in the fourth quarter, with the Consumer Price Index (CPI) rising 0.5 percentage points to 2.9 percent and the Personal Consumption Expenditures (PCE) price index reaching 2.4 percent in November. The Federal Open Market Committee (FOMC), which has a dual mandate of stable prices and maximizing employment, met twice during the fourth quarter, lowering the Federal Funds rate by 25 basis points in each meeting. In the first meeting of 2025, the committee decided to maintain the current rate at 4.25 – 4.5 percent. Projection materials from the FOMC’s December meeting suggest the committee might reign in rate cuts in 2025, showing only two projected rate cuts throughout the year. This cautious approach reflects growing uncertainty surrounding policy proposals from the new administration, which could potentially exert upward pressure on inflation.
As the local economy enters its peak season and following the presidential election, the Executive Business Climate Index (EBCI) for Collier County was up by 6.2 points, the largest increase in the EBCI since the fourth quarter of 2022, registering at 57.5. This result was mostly driven by increases in the sentiment on current and future economic and industry conditions, which saw increases from previous surveys and were above or at the historical medians for the county. However, business leaders' sentiment is not all rosy. Current and future hiring and investment trends continue to slip and are below the historic medians. This is in line with the slowdown in the economic activity seen in the region, as demonstrated by seasonally-adjusted taxable sales, which regionally have declined year-over-year for 14 consecutive months.
In this quarter, the Special Topics survey focused on AI use. The results show that while the majority of businesses utilized AI in some form, only a small portion of businesses saw significant contributions from AI tools and planned to invest further in the future. Some businesses do demonstrate trust in AI tools in some form or capacity. All in all, these results demonstrate that there is a gap in understanding and effective use of AI tools to improve productivity and gains in their bottom lines.
Downloads:
Collier County Executive Business Climate Survey First Quarter 2025 Report
Previous Collier County Executive Business Climate Survey Reports
Acknowledgments:
We would like to thank all of the executives that participated in our survey. Without your continued feedback each quarter, our surveys would not be possible. Furthermore, we would also like to thank our sponsors, Collier County Government and the Greater Naples Chamber of Commerce, for helping make the survey happen.
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