CEO Confidence in the Economy Declines Significantly in Q2 2025 Amidst Record Low Hiring Plans

Declining Confidence Amid Economic Uncertainty



In the latest report from Vistage, the world's largest CEO coaching organization, the confidence levels of small and midsize business (SMB) CEOs have fallen significantly in the second quarter of 2025. The CEO Confidence Index now stands at 77.2, a drop from 78.5 in the previous quarter and considerably lower than the high of 100.8 recorded in Q4 2024. This decline signals a growing concern among business leaders, as economic uncertainty appears to weigh heavily on their decision-making processes.

Record Low Hiring Plans



One of the most alarming aspects of this report is the record low hiring plans among CEOs. Only 42% of CEOs anticipate increasing their workforce in the upcoming year, a noticeable decrease from 45% in Q1 and a staggering 23 points lower than the peak seen last year. At the same time, 13% of CEOs now plan to reduce their workforce, aligning their expectations with the troubled economic landscape reminiscent of the COVID-19 pandemic and past recessions. The looming challenge of hiring is exacerbated by the ongoing impacts of tariffs and trade policies, as well as a rising dependency on artificial intelligence, which is transforming workforce productivity dynamics.

Ongoing Economic Uncertainty



According to Joe Galvin, chief research officer at Vistage, the current economic state is precarious. He states, “Depending on your source, the U.S. economy is either booming or on the brink of collapse, but the reality lies somewhere in between.” The latest findings reveal that half of SMB CEOs believe economic conditions have deteriorated over the past year, while a mere 17% feel things are improving. Looking ahead, only 33% expect the economy to improve in the next 12 months, while 31% anticipate a decline.

Impacts of Tariffs



Two-thirds of CEOs have reported negative effects from trade and tariff policy changes, with 44% of those involved in sourcing goods from China attempting to expedite their shipments amidst the recent tariff pauses. These supply chain disruptions are shifting customer behavior, leading to longer sales cycles and increased delays in purchasing decisions. Consequently, nearly half (49%) of CEOs are planning to raise prices within the next three months, driven by increasing labor costs and overhead expenses, alongside inflationary pressures.

Burnout Among Business Leaders



Perhaps one of the most concerning revelations from the survey is the growing rate of burnout among CEOs. 40% of them rate their work-life balance as “fair” or “poor,” with many struggling with emotional fatigue. This exhaustion is underscored by the fact that 68% report feeling burned out at least occasionally in the last three months, and 21% state they experience it frequently. This mental strain could significantly affect their leadership capabilities and decision-making processes moving forward.

Future Outlook



As Vistage continues to gather insights from CEO sentiment quarterly, it is evident that business leaders will need to cultivate resilience and adapt to these trying conditions. The survey highlights that despite the ongoing challenges, leaders must enhance their focus on maximizing efficiency to optimize their existing workforce, thereby better preparing for the uncertain business environment ahead.

CI's newest findings indicate a cautious approach to navigating economic uncertainties, with hopes for recovery still lingering in the minds of SMB CEOs despite the current bleak outlook.

Conclusion



On the whole, the Q2 2025 Vistage CEO Confidence Index illustrates a challenging environment for SMB leaders. As they grapple with fluctuations in the economy, workforce management becomes crucial to sustaining business performance and stability. Furthermore, addressing the mental health of leaders will be vital in ensuring their effectiveness in guiding their companies through unpredictability. For more detailed findings, you can visit Vistage's official website.

Topics General Business)

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