Economic Insights
This collection of the latest updates and data from the systems integration industry explores leading indicators including the CEO Confidence Index, Purchasing Managers Index, and CSIA updates. We offer our own insights based on the information referenced and interactions with Exotek clients and the SI community.
CEOs grow more optimistic that trade uncertainty will soon resolve, bringing more clarity for business.
- 66% anticipate revenue to grow in 2025, vs. 67% in June and 84% at the start of the year
- 55% expect profits to increase vs. 54% in June, 76% in January
- 33% plan to increase CAPEX vs. 36% in June, 56% in January
- 42% plan to hire vs. 41% in June, 60% in January
Manufacturing PMI® at 49% (+0.5)
- New Orders and Backlogs Contracting
- Production Growing and Employment Contracting
- Supplier Deliveries Slowing
- Raw Materials Inventories Contracting; Customers’ Inventories Too Low
- Prices Increasing; Exports and Imports Contracting
CEO – June
At the midyear mark, CEOs are growing more optimistic that trade uncertainties will soon be resolved, offering greater clarity for business planning. As one executive put it, “The economy will get past the tariff issues.”
Two-thirds of manufacturing CEOs anticipate revenue growth, and over half expect improved profitability. Additionally, one-third plan to increase capital expenditures—often a signal of upcoming automation projects, which bodes well for the systems integrator (SI) community.
While this CAPEX outlook is encouraging, it falls short of the 56% projection made at the start of the year. Project activity is beginning to pick up, but customers remain highly cost-conscious. Many eager SIs are stepping in to meet demand with competitive pricing.
PMI – June
The manufacturing sector contracted in June for the fourth consecutive month, following a brief two-month rebound that came after 26 straight months of decline. However, production has edged into growth territory with a reading of 50.3—an encouraging sign for increased OPEX spending.
Across all industry sectors, respondents cited tariff uncertainty as the primary factor behind the weak performance.
Q2 data in this section is pending.
Exotek Insights – CSIA vs UNXANO Analysis
We have transitioned from tracking US Capital Goods New Orders (USCGNO) to Non-Defense Capital Goods Excluding Aircraft (UNXANO). This shift better aligns with the focus of most system integrators and provides a clearer indication of actual capital spending.
Exotek Insights – UNXANO ROC Analysis
Exotek Insights – CSIA ROC Analysis
Our Key Takeaways
Q2 data in this section is pending.
ROC Analysis
The UNXANO has remained stagnant since late summer 2023 after it began slowing in January 2021. On a positive note, spending remains at a high level. However, recent announcements have added to the uncertainty, making an uptick unlikely in the near future.
System integrators faced a significant slowdown last year, even entering the contraction zone. The second half showed promise with the 3/12 crossing above the 12/12, but the year ended with the 3/12 crossing back down over the 12/12 significantly. The first quarter of this year has turned out to be a positive one with growth being signaled going forward. With all the uncertainty in the market most integrators or very concerned about Q3 and Q4. The revenue in the first four months was primarily driven by eating through backlog. The ROC analysis for CSIA members is somewhat distorted due to the high revenue month in December, when end users typically spend the remainder of their approved budgets.
Our Key Takeaways
Industry sentiment has reached a new low, with over 75% of members expressing a negative outlook for the past three months—an unprecedented level of pessimism. We’re once again facing overcapacity, a situation that previously led to layoffs in late 2024.
One bright spot: SIs are securing a steady stream of smaller projects. This trend aligns with end users prioritizing cost reduction and efficiency gains while they wait for tariff uncertainties to clear. Though large-scale investments remain on hold, these smaller jobs are helping to bridge the gap.
Information in the below section is courtesy of Alex Chausovsky, Director of Analytics & Consulting at Bundy Group — a boutique investment bank specializing in business sales, capital raises, and strategic advisory services.
Macro Economic and Trump Policies
Labor Market and Strategic Considerations
Our Key Takeaways
At the 2025 CSIA Conference, keynote speaker Alex Chausovsky, Director of Analytics and Consulting at Bundy Group, delivered a presentation titled “Driving Business Value Through Insights into Today’s Economy.”
Alex outlined the evolving global economic landscape, describing a shift toward a multi-polar world divided between largely free-market economies and autocratic regimes. He noted the growing influence of emerging economies like Brazil, Australia, and Turkey, as well as the rising power of multinational corporations.
Despite widespread concerns, Alex highlighted that the U.S. share of the global economy is rebounding—now at 26%—while Europe and Japan are declining, contributing to China’s relative rise. The U.S. dollar remains dominant, accounting for 88.4% of global trade transactions. Although the national debt is a concern, he pointed out that 80% of it is domestically held, with China holding just 2%.
On U.S. trade policy, Alex criticized tariffs on allies like Canada and Mexico but supported strategic tariffs on China, viewing them as a way to leverage U.S. economic strength. He suggested that if trade negotiations are resolved in the coming months, a recession is not inevitable.
However, he expressed concern about the labor market—not due to illegal immigration, but because of a looming shortage of skilled professionals. This is driven by an aging population and a mismatch between graduates’ qualifications and the needs of the professional workforce.
He concluded with strategic recommendations and actionable insights tailored for the systems integrator (SI) community.