Predictions for what’s to come from around the business and veterinary worlds.
Next year will have its own challenges and rewards, experts say. Here’s a look at a round-up of key trends for 2025.
On the impact of inflation
From the American Veterinary Medical Association:
The percentage of U.S. households that own dogs and cats has increased steadily from 1991 to 2024. At the same time, many consumers have been getting more budget conscious as inflation has limited their spending power.
For small animal practices, these trends have resulted in fewer product purchases and fewer patient visits, which Katelyn McCullock, AVMA chief economist, says are here to stay for 2025. During the 2024 AVMA Veterinary Business and Economic Forum, she also highlighted several macroeconomic factors impacting U.S. businesses and households, as well as the chances that Americans will soon endure another recession.
“The economic growth and consumer pressures just seem like they are lining up to enter a weaker economic phase, and that will impact veterinary visit data pretty significantly for 2025,” she said. “How long that lasts, I think is anyone’s guess, but we’ll have to just keep monitoring that data and the consumer side of things.”
On selling your practice
Takeaways for independents, from Ryan Leech, growth consultant in Today’s Veterinary Business:
While 2021’s multiples in the upper teens and 20s might not return, veterinary practices are seeing some of the highest valuations across any sector. Selling at a double-digit multiple is still a great win. Due diligence is as crucial as ever, especially with buyers involving private equity components.
For private practice owners not quite ready to sell, the current environment presents an opportunity to strengthen hospital operations. As demand dips, driving revenue growth becomes more challenging, so the focus should shift to enhancing efficiencies with technology and optimizing expenses. Inventory management, a major cost, is an easy target for improvement and can boost profits, whether for a future practice sale or for reinvestment. For those considering an exit in the next year or two, now is the time to make changes, as buyers will scrutinize recent performance to assess the financial health of potential acquisitions.
Many practice owners who didn’t act on the sky-high multiples of 2021 are now more eager to exit and retire. For those owners, the shift in market conditions might be the nudge they need to sell sooner rather than later.
On the economy
Vanguard’s assessment: Global inflation has slowed sharply in the last two years and is now within touching distance of 2%. But the path to disinflation has been uneven across countries and regions, with most developed markets enduring monetary policy–induced slowdowns to get there. The United States is a notable exception, having experienced accelerating economic growth and full employment with no discernible effect from restrictive monetary policy.
Has the U.S. achieved a soft landing? Or will the impact of high interest rates eventually lead to a hard landing? These questions have dominated the market narrative over the last two years, with the focus on whether the U.S. Federal Reserve can perfectly time the rate-cutting cycle to achieve painless disinflation.
Yet this emphasis on the “landing” may not fully explain the pairing of exceptionally strong growth and falling inflation that we’ve witnessed in the U.S. The forces that do explain it suggest a new narrative for the economy and markets.
In our 2025 outlook, we adopt a framework centered on the supply-side forces that have shaped the U.S. economy. These include a surge in both labor productivity and available labor. Supply-side forces offer a more satisfying explanation for the positive growth and inflation dynamic. Emerging risks—such as those related to immigration policies, geopolitics or potential tariffs—also fit more naturally into this supply side–aware framework.
Goldman Sachs predicts that trade tariffs will raise inflation, at least in the short term: “The experience from the first Trump administration shows that tariffs are largely passed on to consumer prices.”
Source: https://www.goldmansachs.com/images/insights/2025-outlooks/Tailwinds-Probably-Trump-Tariffs.pdf
On the veterinary shortage
A recent analysis of the drivers of supply and demand for veterinary services in the U.S. shows that the number of graduates from existing U.S. veterinary colleges is likely enough to meet demand to 2035.
The conclusion comes from a recent analysis performed by Brakke Consulting Inc., which was commissioned by the American Veterinary Medical Association (AVMA). The analysis looked at trends in the number of veterinary graduates and pet-owning households, as well as consumers’ disposable income and pet spending.
“In short, the projections in this analysis do not justify a conclusion of overall excess capacity or capacity shortage by 2030 or 2035,” says John Volk, a senior analyst with Brakke Consulting. Meanwhile, the population of veterinarians is likely to grow faster than pet-owning households if all 13 proposed veterinary schools become accredited. With 33 U.S. veterinary colleges currently recognized by the AVMA Council on Education (AVMA COE), this would represent a nearly 40% increase in a 10-year period.
That means in order to avoid potential negative economic impact, pet owners would have to be willing to spend more and more on pets, said Volk, in an exclusive interview with AVMA News ahead of the report’s publication.