CEO Confidence Declines Sharply in Second Quarter of 2026 Amid Rising Business Risks
In the second quarter of 2026, CEO confidence has taken a significant hit, as indicated by the latest Measure of CEO Confidence™ published by The Conference Board in cooperation with The Business Council. The confidence index dropped to 47 from a previous reading of 59 during the first quarter of the year, signaling a shift toward pessimism among business leaders. This downturn is particularly alarming as a score below 50 denotes negative sentiment among those surveyed.
The survey included responses from 141 CEOs and was conducted between May 4 and May 18, 2026. According to Dana M. Peterson, Chief Economist at The Conference Board, the decline in CEO confidence reverses the previous quarter's optimism, as executives now perceive the economy as substantially worse than it was six months earlier. This sentiment is corroborated by a notable increase in leaders indicating a decline in current economic conditions and expectations for the near future.
In the survey, only 15% of CEOs felt that economic conditions have improved over the past six months, a stark contrast to the 39% who believed so in the first quarter of 2026. Conversely, 47% reported a deterioration in economic conditions, a significant rise from just 8% in the prior quarter.
The assessment of conditions within their own industries has also worsened, though not as drastically. 33% of CEOs indicated conditions in their sectors had improved, down from 42% in Q1. Furthermore, 33% acknowledged worsening conditions, compared to 14% in the last quarter. The data points to growing concerns, especially regarding short-term expectations. Only 24% of CEOs foresee economic improvements in the next six months, which is down from 43% in Q1, while 40% anticipate further economic decline, rising from 13% previously.
Despite the overall downturn in confidence, planned business investments have remained relatively stable. Most CEOs reported no changes in their capital investment plans for Q2. However, a growing number of respondents forecasted increases in capital expenditures over the next year, while the proportion anticipating reductions in spending has lessened compared to the first quarter.
The current employment landscape reflects a cautious approach, with 31% of CEOs planning workforce reductions, an increase from 27% in Q1. In contrast, only 28% expect to expand their staff, down from 31%. Additionally, 40% of those surveyed foresee no changes in their workforce.
Finding qualified personnel has generally become more manageable in Q2. Nonetheless, there’s been a slight uptick in CEOs reporting difficulties in recruitment, which rose from 43% in Q1 to 53% in Q2. Wage plans remain mostly unchanged, although adjustments appear to be centered in the 3-4% range—a reflection of economic caution.
A significant concern emerging from the survey is the increased anxiety surrounding various business risks. Cybersecurity threats have become a pressing issue for business leaders, with nearly two-thirds flagging this as a top priority. Geopolitical risks and the implications of emerging technologies like AI are also of considerable concern. Additionally, issues tied to supply chains and energy availability have gained prominence among the challenges facing industries today.
Finally, when addressing the potential impact of AI on their sectors, 56% of CEOs expressed skepticism that AI would fundamentally alter their industries, estimating only a moderate influence. Nevertheless, many recognize the necessity to upskill their workforce, with nearly one in four indicating that over half their employees might need retraining within the next two years.
The latest findings from The Conference Board illustrate a critical time for CEOs, marked by declining confidence and heightened concerns about economic conditions and business risks. As they navigate these turbulent waters, it will be essential for leaders to adapt and strategize accordingly to foster resilience and growth in the forthcoming quarters.
Declining Optimism
The survey included responses from 141 CEOs and was conducted between May 4 and May 18, 2026. According to Dana M. Peterson, Chief Economist at The Conference Board, the decline in CEO confidence reverses the previous quarter's optimism, as executives now perceive the economy as substantially worse than it was six months earlier. This sentiment is corroborated by a notable increase in leaders indicating a decline in current economic conditions and expectations for the near future.
In the survey, only 15% of CEOs felt that economic conditions have improved over the past six months, a stark contrast to the 39% who believed so in the first quarter of 2026. Conversely, 47% reported a deterioration in economic conditions, a significant rise from just 8% in the prior quarter.
Industry-Specific Concerns
The assessment of conditions within their own industries has also worsened, though not as drastically. 33% of CEOs indicated conditions in their sectors had improved, down from 42% in Q1. Furthermore, 33% acknowledged worsening conditions, compared to 14% in the last quarter. The data points to growing concerns, especially regarding short-term expectations. Only 24% of CEOs foresee economic improvements in the next six months, which is down from 43% in Q1, while 40% anticipate further economic decline, rising from 13% previously.
Employment and Investment Outlook
Despite the overall downturn in confidence, planned business investments have remained relatively stable. Most CEOs reported no changes in their capital investment plans for Q2. However, a growing number of respondents forecasted increases in capital expenditures over the next year, while the proportion anticipating reductions in spending has lessened compared to the first quarter.
The current employment landscape reflects a cautious approach, with 31% of CEOs planning workforce reductions, an increase from 27% in Q1. In contrast, only 28% expect to expand their staff, down from 31%. Additionally, 40% of those surveyed foresee no changes in their workforce.
Challenges in Recruitment
Finding qualified personnel has generally become more manageable in Q2. Nonetheless, there’s been a slight uptick in CEOs reporting difficulties in recruitment, which rose from 43% in Q1 to 53% in Q2. Wage plans remain mostly unchanged, although adjustments appear to be centered in the 3-4% range—a reflection of economic caution.
Rising Business Risks
A significant concern emerging from the survey is the increased anxiety surrounding various business risks. Cybersecurity threats have become a pressing issue for business leaders, with nearly two-thirds flagging this as a top priority. Geopolitical risks and the implications of emerging technologies like AI are also of considerable concern. Additionally, issues tied to supply chains and energy availability have gained prominence among the challenges facing industries today.
Finally, when addressing the potential impact of AI on their sectors, 56% of CEOs expressed skepticism that AI would fundamentally alter their industries, estimating only a moderate influence. Nevertheless, many recognize the necessity to upskill their workforce, with nearly one in four indicating that over half their employees might need retraining within the next two years.
Conclusion
The latest findings from The Conference Board illustrate a critical time for CEOs, marked by declining confidence and heightened concerns about economic conditions and business risks. As they navigate these turbulent waters, it will be essential for leaders to adapt and strategize accordingly to foster resilience and growth in the forthcoming quarters.
Topics General Business）
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