A heck of a haze

A Q3 GDPNow reading of 3.8% vs. trucking volumes that can’t get off the mat. Stronger-than-expected retail sales vs. consumer confidence that is sliding sharply. Suddenly lively home sales vs. another round of tariffs from the Trump administration that has manufacturers and materials executives scratching their heads. You could argue that the economic outlook is as hazy now as it has been at any point over the past five years — and you could argue with equal conviction that things are getting better or worse.

— Geert De Lombaerde
 

• FedEx Freight sees little, if any, growth through mid-2026

• Demand for cutting tools is up despite doubts – ‘The worst is over’

• A reshoring curveball: Leaders are ‘pausing to reassess’

• The modern supply-chain leader’s guide to smarter nearshoring
 

‘Clearly articulate a sense of urgency’

Not up for debate is the need to weave AI into your teams’ work. Analysts’ spending forecasts vary wildly—maybe, just maybe, no one really has a clue?—but they’re all in the range of hundreds of billions of dollars. Now to generate that ROI…
 

• 70% of large companies will adopt AI for forecasting by 2030

• AI won’t save your lean transformation but it can supercharge it
 

“Early returns indicate that knowledge work
will experience the biggest disruptions. That
opens doors to the transition of early- and
mid-career back-office staff to more
front-line positions in operations.”

That’s SAP’s Muriel Rakotomalala writing for Chemical Processing
about AI’s potential to soften the shock of the “silver tsunami” of
Baby Boomer retirements. It’s not just a story for the chemicals sector.
 

Innovating your way to profitable growth

Given pricing pressures and a wobbly demand environment, many executive teams are leaning on “profitable growth” as their mantra of choice. That includes making tough calls about investing in AI and (maybe increasingly “or”) talent but also learning how to repeatedly design, develop and market new products. Figure out that equation and you can afford to worry a bit less about the macro picture.
 

• From 3M and Lego: How innovation power drives pricing power

• The FTC has withdrawn a sweeping proposed non-compete ban
 

12%

The share of leaders who say their businesses
will hike total salaries by at least 5% next year

That’s an eye-catching outlier from an Endeavor Business Intelligence 
report showing a generally and understandably cautious stance 
toward pay growth. Another stat: Almost one in five companies
still need to settle on a salary strategy.
 

• More than 1/3 of firms are budgeting ’26 salary increases below 3%

• Talent Pulse: Growing the pool we all fish from
 

What we’ll be watching

More than ever, I want to see real-time commentary from leaders about how business is now and what they expect from 2026. Even before the federal government’s shutdown this week, economic data was growing noisier due to adjustments and one-time effects. As we head toward a Q3 earnings season during which many executive teams will take their first stab at a 2026 outlook, I’ll be looking to see how many of them will want (or need) to get ahead of potentially bad news.