CEO Confidence Drops to Record Low Amid Economic Uncertainty in Q2 2025

In a startling turn, the Conference Board Measure of CEO Confidence™ in collaboration with The Business Council has seen a shocking drop of 26 points in the second quarter of 2025, plummeting to an alarming level of 34. This marks the lowest reported figure since the end of 2022, representing a significant shift in outlook among leaders in the business sector.

This drastic decline comes on the heels of a previously optimistic first quarter, highlighting a swift change in sentiment as CEOs respond to evolving economic conditions. The survey, conducted from May 5 to May 19 with participation from 133 CEOs, recorded the most significant drop in confidence since the survey's inception in 1976.

Deteriorating Economic Assessment

Stephanie Guichard, a Senior Economist at the Conference Board, noted that the collapse of CEO confidence has been driven primarily by negative assessments of current economic conditions. In fact, 82% of CEOs reported that the economic environment had deteriorated over the last six months, a drastic rise from just 11% in the prior quarter. Only 2% believed conditions had improved, down from an optimistic 44% in Q1.

Moreover, 69% of CEOs expressed concerns about conditions within their specific industries—an increase from 22% in Q1. The shift demonstrates a severe perception of economic health among top executives and paints a stark picture of the current climate.

Pessimistic Future Projections

The outlook for the immediate future is equally concerning. A staggering 64% of CEOs expect economic conditions to worsen in the next six months, a dramatic increase from 15% previously. Only 18% of CEOs anticipate improvement, down from 56%. The decline in optimism not only reflects the general economic sentiment but also indicates growing worry within specific industries.

In terms of workforce management, the survey revealed nuances in employment expectations. Only 44% of CEOs plan to maintain their workforce size, and there is a notable decrease in those aiming to expand their teams—from 32% to 28%. However, the proportion of CEOs planning to downsize slightly increased to 28%.

Capital Spending and Wage Adjustments

The survey also shed light on investment strategies and wage growth. The share of CEOs indicating plans to revise their capital spending downwards doubled to 26%. This uptick signifies caution among businesses in anticipating future growth potential. Concurrently, only 19% of CEOs anticipate increasing their spending, a drop from 33% in the previous quarter.

On wages, a majority of leaders—53%—intended to implement salary increases of 3% to 3.9% within the next year. However, this is accompanied by a growing percentage of CEOs considering raises in the 2.0-2.9% range, moving from 24% to 34%.

Key Business Risks

Amid these turbulent assessments, CEOs identified geopolitical instability and trade tariffs as the two greatest risks threatening their industries. Regulatory uncertainty closely follows these concerns. Cyber risk, previously a top worry for executives, has now fallen to fourth place in their rankings of business threats.

Despite the significant shifts in all areas of the CEOs' confidence metrics, the one relatively positive note was expressed by those responding after the U.S.-China trade deal announcement on May 12. Although fears about the economy persisted, there was a slight reduction in pessimism observed in responses collected following this announcement, indicating that while confidence took a hit, some leaders might still hold onto a dim hope.

Conclusion

CEO confidence has taken an unprecedented plunge in Q2 2025, raising alarms across industries about potential recessions and the health of the economy as a whole. As CEOs brace for uncertain future conditions, it is crucial for businesses to strategically navigate the economic landscape, maintaining vigilance, adaptability, and readiness to pivot as required. With indicators consistently leaning towards caution, organizations must be poised to respond to evolving challenges in both the national and international arenas.