A new meta-analysis by Murphy & Koehler (2021) finds cutting reduces muscle growth but not strength development compared to bulking.

This is in line with my experience. Almost all of my clients keep gaining strength while cutting and it’s often hard to see purely based on their strength data if they’re indeed in energy deficit. Muscle growth is definitely harder to realize in deficit, although many people overestimate the effect of energy balance on muscle growth, leading to the myth that muscle growth is only possible in energy surplus. In this analysis, several studies found muscle growth in energy deficit. Clearly, it is possible to gain muscle in energy deficit for many people, but of course you generally don’t gain as much as when you’re bulking.
To put things in perspective, an energy deficit of 500 kcal reduced the average effect size of muscle growth to a non-significant 0.16 (small). However, this suggests at least 50% of people still gained some degree of muscle. Smart programming of course plays a large role here.
The effects of age and sex
Strength vs. size
Strength gains, especially in the short-term, are in large part due to neural improvements in the neuromuscular system and our brain. These adaptations are probably not affected much by energy balance, as they’re more like software updates than building new hardware. However, over the long run the lack of muscle growth should logically impair strength gains. Strength gains may also suffer due to higher fatigue levels when recovery is poorer.
BMI
The meta-analysis also found BMI significantly negatively predicted muscle growth. In other words, people with higher BMIs tended to gain less muscle mass. Specifically, each BMI point higher reduced muscle growth as much as an 81 kcal deficit. Relative to age, each BMI point reduced muscle growth as much as aging ~5 years. This could be due to anabolic resistance in overweight individuals, as a recent review concluded and I’ve previously debated with Nuckols & Trexler. However, in this case it could also mean that more muscular individuals gain less muscle, as they’re already more advanced. Probably a bit of both.
Conclusion
Overall, being in energy deficit most likely impairs muscle growth, but the effect is not major and muscle growth is still possible in energy deficit for many people and strength gains should still be very realistic. An important take-home message in my view is that if you’re not gaining any strength while cutting, you’re most likely losing muscle mass. Lack of strength development means the likely positive neural adaptations must be overshadowed by muscle loss.
New study reference
Energy Deficiency Impairs Resistance Training Gains in Lean Mass but not Strength: A Meta-Analysis and Meta-Regression. Chaise Murphy, Karsten Koehler, First published: 08 October 2021. https://doi.org/10.1111/sms.14075