**United States**: The latest Vistage CEO Confidence Index reveals a historic drop in confidence among SMB CEOs, plummeting 22 points to 78.5 in Q1 2025, driven by growing concerns over tariffs, inflation, and hiring cutbacks as economic pressures mount.
Small and midsize business (SMB) CEOs in the United States have reported a significant drop in confidence regarding the economy, as revealed by the latest Vistage CEO Confidence Index. This decline, marking a historic 22-point plunge from 100.8 in the previous quarter to 78.5 in Q1 2025, has been attributed to growing concerns over tariffs and inflation, leading to a more cautious outlook among business leaders.
Joe Galvin, chief research officer at Vistage, remarked that “CEO confidence took a significant hit in Q1 2025, a stark juxtaposition to the gains we saw in Q4.” Galvin explained that while the current low levels might raise concerns, they are reminiscent of the sentiment seen in Q3 2023, suggesting that previous optimism may have been overly influenced by expectations concerning a new administration’s potential impact on the economy. The recent findings underscore ongoing economic challenges that have prompted a more reserved perspective from CEOs.
The survey, which gathered insights from 1,796 CEOs between March 3 and 17, highlighted several key concerns:
- A significant 41% of CEOs reported a worsening economic environment over the previous year, with 42% predicting continued deterioration.
- Tariff policies are causing alarm, with 69% of business leaders indicating that trade policy changes would have negative implications for their operations.
- The issue of talent acquisition remains pressing, as a notable 45% of CEOs plan to increase their workforce, while 14% indicated intentions to reduce hiring. This level of anticipated hiring cutbacks has not been seen since the pandemic and the recession of 2008-2009.
- CEOs are also navigating the potential effects of changes in government spending, with varied expectations about direct and indirect impacts on their businesses.
Economic pressures are leading many companies to raise prices, with 44% of respondents having already implemented price hikes this year, and 51% planning further increases in the next three months. Among those planning price increases, 13% are considering hikes exceeding 10%.
Interestingly, the survey shows a marked uptake of artificial intelligence (AI) within companies, with 70% of CEOs and 61% of leadership teams actively integrating AI into their operations. Furthermore, 47% of CEOs are focused on training employees to effectively use generative AI technologies.
The findings of the Vistage CEO Confidence Index serve as an important indicator for understanding the sentiment and potential trajectories of small and midsize businesses in the current economic climate.
Source: Noah Wire Services
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