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Small and Midsize Business CEOs Show Modest Optimism in Q3

The latest report from Vistage Worldwide, released on October 9, 2025, reveals a slight increase in confidence among small and midsize business (SMB) leaders. According to the Q3 2025 CEO Confidence Index, confidence levels have climbed to 81.9, up from 77.2 in the previous quarter. This Index is evaluated quarterly, providing valuable insight into CEO sentiment since 2003.

Conducted between September 2 and September 16, the survey indicated that while optimism has improved, CEOs remain cautious, particularly regarding how recent policy changes might impact their operations. As Joe Galvin, the chief research officer of Vistage, states, many CEOs are currently in a "holding pattern," carefully monitoring evolving trade agreements, tariffs, taxes, and immigration policies.

Shifting Focus and Persistent Challenges

In Q3, SMB leaders have shifted some of their concerns. Unlike the previous quarter, where federal policy was a major worry, this time, customer behavior and the slowing sales cycle have emerged as significant worries. Economic uncertainty has left many CEOs contemplating whether to adopt a more conservative approach or begin pursuing growth strategies to take advantage of potential opportunities.

The report also highlights significant challenges in hiring and retaining skilled talent. As wage inflation appears to dissuade potential applicants, CEOs are grappling with high turnover rates and a tightened labor market, making recruitment difficult. Furthermore, the updating tariffs and trade policies continually disrupt supply chains, increasing operational costs and posing the risk of project delays.

Tariffs Impacting Business Operations

Tariffs have undeniably influenced business operations, as noted in the Index:

• - 62% of SMB CEOs report increased costs due to tariffs.
• - 43% have raised prices, and 51% plan to do so in the next three months.
• - Among those raising prices, 64% are implementing hikes of 4-10%, while 10% are considering increases exceeding 10%.
• - Additionally, 36% of respondents cited declining customer demand, 33% observed revenue declines, and 46% reported decreased profits.

In response to these challenges, 16% of surveyed CEOs noted they had reduced hiring as a direct result of tariff impacts.

Outlook for Hiring and Employee Engagement

Interestingly, there is a slight uptick in hiring plans, with 48% of SMB CEOs planning to increase their workforce in the upcoming year, a 6% increase from the previous quarter. However, it's important to note that 13% still expect to reduce headcount in the next 12 months, indicating ongoing workforce concerns.

As workplace dynamics stabilize, many leaders are prioritizing employee engagement. The survey revealed that:

• - 43% of SMBs are utilizing a hybrid workforce model, while 45% primarily operate on-site.
• - When tracking employee engagement, CEOs predominantly rely on one-on-one meetings (81%), turnover and retention rates (61%), and employee surveys (51%).
• - Key focus areas for enhancing employee engagement include clear communication and transparency (89%), fostering a positive culture (82%), and providing recognition (81%).

Improving Profit and Revenue Outlooks

Despite the lingering challenges, CEOs’ expectations regarding profitability and revenue improvement have started to display a positive trend. Now, 60% anticipates growth in sales revenues over the next 12 months, up from 54% in the last quarter. Additionally, 48% of respondents believe their profitability will experience an uplift, rising from 41% previously.

In conclusion, as the economic landscape continues to fluctuate and policies evolve, the latest Vistage CEO Confidence Index reflects a cautious yet slightly positive outlook among SMB leaders. Their ability to adapt and navigate through these changes will be critical for sustaining their growth trajectories in the coming months.

For further details, visit Vistage CEO Confidence Index.