As a Senior Economist for Veterinary Management Groups (VMG), Charlotte McKay plays a pivotal role in analyzing veterinary market industry trends, evaluating economic factors and providing strategic insight to support VMG members.
“We want to provide our members with tangible tools to help change behaviors within the practice, so they can improve efficiency and productivity, alleviate pain points, and become all-around exceptional business owners,” she said.
Economic data is a good place to start. There has been a growing interest among more veterinarians and practice staff in the economics of the practice, McKay said, which is vital to business success. VMG’s thought leadership team wants to help practice owners think beyond the short term and what they do now or in the next six months, or even in a year or two.
“We want to help them think long term through the economic business cycle,” McKay said. “For example, we want to help set practice owners up for success before the economy slows, so they know how to navigate through it and come out on the other side of the trough. And then how can we (VMG) support them through these difficult times, but also look forward to when the economy expands again? How can we set them up for the future and be ready for anything?”
Today’s market conditions
Properly preparing for the future includes recognizing and adjusting to today’s market. McKay said when observing the U.S. economy, the housing market is one area she keeps an eye on, looking at the Home Price and Housing Affordability indices. She has watched the housing market and how values have increased over the last few years with particular interest. Part of the reason was personal – she and her husband purchased a house last year, so she dealt with the challenges of increased home values and inflation as they related to securing a home mortgage.
But the housing market’s ups and downs can also have an effect on the veterinary industry. “These trends can affect pet owners’ purchasing power, and their decisions,” she said. “Pet owners who have bought a house, or want to buy a house, must deal with higher mortgage payments, as well as other house expenses. In most cases there is going to be a tradeoff, and it can affect a pet owner’s budget, and their willingness to pay for goods and services. They may have to decide whether they can pay for veterinary care, or if they need to meet the need of a monthly mortgage payment, or some other expense.
Consumers are faced with lots of decisions in their day-to-day around price. With the rise in prices in the U.S., the pet owner will heavily factor price into their decision-making. The different markets, like the housing market, are indicators of how well the economy is doing and can be telling of consumer behavior and purchasing power and decisions.
While veterinary spending has increased despite the higher veterinary prices, its rate of increase has slowed as of late, which could be an indicator of an upcoming recessionary period.
What’s to come in 2025
For 2025, McKay is keeping an eye on the Trump administration and how its policy decisions could affect the economy, specifically at the individual and business level.
One will be tariffs. Many products, like pet food, toys, and vaccines are manufactured overseas, and tariffs will increase prices for those products to be made and shipped to the U.S.
Another topic is immigration. Any change in labor can impact the agricultural industry.
Who will fill these jobs, if any? Will employers have to raise wages to attract more workers? (This hasn’t always worked in the past.) Will a labor shortage in turn cause prices to rise? These questions will have economic ramifications for both pet owners and the veterinary practices who serve them.
“Everything is connected, and as a consumer one might not think of everything that is involved in consuming a product,” McKay said. “On a microeconomic level (small business) some will feel the effects of the new administration’s policies, while others won’t.”
Yet McKay is confident that the veterinary profession – and independent practitioners in particular – are resilient enough to navigate through whatever market conditions arise. “They are eager to learn and seek solutions and are motivated,” she said. “In order to succeed, they not only must know what is going on, but why it’s important to them – they need to know what to do with the information and how to make it actionable. That’s exactly what VMG is striving to do for its members by providing them with the tools and insights to help them navigate uncertainty and future-proof their practices.”
