Controllership year in review

January 22, 2025

A blog post by Beth Kaplan, Christine Murphy, and Michael Wolf

As we enter the new year with new resolutions and expectations for the year ahead, the Center for Controllership has traditionally marked the calendar change as an opportunity to highlight accounting industry trends to look out for and expectations for accounting and controllership throughout the year. 2025 is set to be a year of multifaceted transformation; and to start the year with fresh eyes and confident expectations, we looked to answer questions to help set the tone and direction for this year. What new technology will emerge? What is shaping the economy? What should controllers know? Will the new administration spark changes to the business landscape?

With overarching themes around post-election expectations, artificial intelligence (AI) spreading across every landscape, and possible shifts to the M&A and regulatory landscape, here are some of the controllership trends for finance and accounting to think about in the new year and beyond.

The economic outlook for business and consumers

The Fed is expected to hit its inflation expectations this year

Core inflation will likely align with what the Federal Reserve Board (Fed) predicted by the year's end. This suggests the Fed can cut rates and is likely on its way to achieving its inflation target. That said, services inflation is the main impediment for the Fed and rent and transportation services inflation may prevent total inflation from reaching the 2% target.¹ However, more progress is expected. In addition, even if the Fed cuts rates quickly, stimulus may lag. Monetary policy primarily works through the housing market, but mortgage rates may slow down even after the Fed starts cutting. This could also lead to faster rate cuts.

Consumer spending is likely poised for a modest slowdown

Incomes are barely growing faster than spending. As income growth moderates, consumer spending should also moderate. This year, an acceleration in income growth is unlikely. Employment growth has naturally slowed as economy reaches toward "full employment;" and at the same time, wage growth is weakening. That said, household finances look good on average, though cracks are appearing. Most households spend very little of their take-home income on service debt, and credit card and auto loan delinquencies are rising quickly.²

Business and finance conditions are improving

Business investment has held up, thanks to more building. Industrial policies have encouraged a wave of construction, but growth is already slowing. Investment in equipment and software is accelerating again. Financing conditions are improving as well. The share of banks that are tightening financial conditions has fallen significantly, which may help limit the rise in business bankruptcies.³

Keep an eye on…

New administration changes to economic policy: Economic policies, such as tax cuts and tariffs, may change and could have large effects on the US economy.

Shifts to the M&A and regulatory landscape

M&A US and Global market is trending up

In the US M&A market, M&A volume in the third quarter of 2024 increased for the fourth consecutive quarter, while value grew 16% quarter over quarter (QoQ) (to $326 billion). In addition, the number of iconic deals ($1 billion+) for the third quarter of 2024 reached 67—the highest quarterly count since the first quarter of 2022 (70 deals). The third quarter deal value also increased 19% QoQ to $247 billion.⁴

In the Global M&A market for the third quarter of 2024, Global M&A volume increased for the second consecutive quarter to reach 10,798, while value ($623.3 billion) remained almost unchanged from the second quarter. Globally, the total value of iconic deals ($1B+) surpassed $500 billion for the first time since 2022. Iconic volume also rose to 144 transactions—the highest level since 2021.⁵

Energy and technology M&A activity is leading by volume and value

By September 2024, the energy and chemicals sector value increased by 62.7%, while volume increased by about 27% compared to the prior year-to-date period. Notably, banks and capital markets (B&CM), insurance, and consumer products also had value growth in 2024, but just one or two large deals in their sector primarily drove their growth.

For iconic deal volume, energy and commerce (with 32 deals), technology (31 deals), and life sciences (22 deals) were the leaders, with a combined value of $281 billion. This was 78% of the total M&A value. Consolidation in the energy sector and a rebound in tech acquisitions helped boost M&A activity in the first nine months of 2024, and this boost will likely continue for the foreseeable future. Look out for these industries to continue leading with a value and volume boost in the year ahead.⁶

The rising wave of Artificial intelligence (AI) and next-gen technology

Artificial intelligence and next-gen tech will continue to scale

AI could start to produce real change for finance and the economy, but the timing and magnitude remain uncertain. For example, AI could impact the productivity trajectory, a primary component of real GDP growth. There are wide-ranging estimates for the macroeconomic effects of AI, but the economic effects of technological innovation typically take a long time to become evident in productivity statistics. It is likely that more adoption of AI and the continued advancement of the technology are needed for a strong productivity response.

Investment in AI is increasing, but the clock is ticking to scale and create value.

Many organizations are increasing investments in Generative AI, given the strong value seen to date.⁷ However, some critical challenges are measuring value and governance and risk. In addition, regulations surrounding AI may change this year with the new administration, which should also present additional challenges and opportunities.

The convergence of AI and other next-gen tech will continue to transform the controllership function

Emerging technologies impact controllership both as a function and through the role of controllers. As new technology, data, and intelligent tools continue to innovate and converge with AI and other next-gen tech, controllers and finance professionals will likely continue their trajectory toward catalyst and strategist roles within their organizations.

These are just some of the major themes to look out for and accounting industry trends for the new year. To hear more insights for the year ahead in controllership, including Deloitte’s economic outlook and predictions for 2025 and beyond, listen to our Dbriefs webcast, Controllership year in review: Economic outlook and post-election expectations.

To explore more considerations for AI and other next-gen technology trends, take a look at the IMA® (Institute of Management Accountants) and Deloitte & Touche LLP’s new survey report, NextGen Controllership: Harnessing AI and emerging technologies to transform finance and accounting.

^1. Board of Governors of the Federal Reserve System, Federal Open Market Committee’s (FOMC) economic projections meeting materials, December 17–18, 2024.
^2. Haver analytics
^3. Haver analytics
^4. Sources: S&P Global Market Intelligence, LLC – S&P Capital IQ
^5. Sources: S&P Global Market Intelligence, LLC – S&P Capital IQ
^6. Sources: S&P Global Market Intelligence, LLC – S&P Capital IQ
^7. Jim Rowan et al., State of Generative AI in the Enterprise: Quarter three report, Deloitte, August 2024.