Revival of CEO Confidence in Q3 2025: A Cautious Outlook for Businesses
In Q3 2025, confidence among CEOs has shown a remarkable rebound, with The Conference Board Measure of CEO Confidence™ rising to 49, a significant increase from 34 in Q2. This recent survey, conducted between July 14 and 28 and involving 122 CEOs, indicates a shift in sentiment towards the economic landscape, although it still reflects caution rather than unbridled optimism. According to Stephanie Guichard, a senior economist at The Conference Board, this recovery in confidence follows a period of heightened uncertainty caused by escalating trade tensions between the United States and China. The improved figures can be interpreted as a sign of easing fears, especially concerning trade negotiations, which have had a substantial impact on business sentiment. The details reveal that all three components of the CEO Confidence Measure saw improvement, moving from negative to almost neutral territory, suggesting a more stable outlook ahead. Interestingly, the CEOs' perspectives on present economic conditions exhibited the steepest recovery, highlighting a newfound optimism regarding both the overall economy and their specific industries. For the first time in a while, the proportion of CEOs fearing a recession within the next 12 to 18 months has plummeted from a shocking 83% in Q2 to a more manageable 36% in Q3.
While the optimism is palpable, CEOs continue to navigate various challenges. Roger W. Ferguson, Jr., Vice Chairman of The Business Council, noted that concerns regarding trade and tariff risks have declined, now ranking third among business risks faced, below geopolitical instability and cybersecurity threats. Moreover, a noticeable trend is the rising number of CEOs encountering difficulties in finding qualified talent, alongside a growing percentage planning to reduce workforce size—a trend that has been evident for the past five quarters. The current survey revealed that 34% of CEOs anticipate cutting their workforce, compared to only 27% expecting to expand, with 39% likely to maintain staffing levels.
The anticipated increase in wages is another indicator of CEO sentiment, with 61% of respondents planning to raise salaries by at least 3% over the next year—up from 58% previously. However, most CEOs have reported no changes to their capital expenditure plans, although a larger share indicated cuts in investment plans than upgrades, a trend worsening for the second consecutive quarter.
Analyzing the sources of rising cost pressures, the majority of CEOs reported issues stemming from suppliers (71%), materials (64%), and technology (63%). Wage pressures are also significant but are comparatively lower, at 47%. As a countermeasure to these escalating costs, CEOs are prioritizing technology for productivity enhancements (93%), negotiating terms with suppliers (89%), and upskilling their workforce (83%). The continued focus on implementing cost-saving measures reflects a broader strategy to mitigate financial pressures, with nearly two-thirds of CEOs also indicating the potential for increased consumer prices over the next year. Only a small fraction (19%) are prepared to absorb higher costs into their profit margins.
The Q3 findings reveal a marked shift in perception regarding current economic conditions. Only 34% of CEOs reported that conditions were worse than six months prior, a sharp decline from 82% in Q2. Conversely, 22% now state that conditions have improved—a significant jump from a mere 2% previously.
CEOs' evaluations of their specific industries have also rebounded, with only 38% reporting worsened conditions—down from 69%—and 18% finding improvement, up from just 7% in the previous quarter.
When looking ahead, CEO expectations for economic conditions demonstrate a recovery to more neutral ground in Q3. Now, 30% project worsening conditions, down from 64%, while an equal share of 30% anticipates improvements—up from 18%. Similarly, expectations for their own industries have turned slightly optimistic, with only 25% expecting a decline, down from 51%, alongside an increase in those forecasting an uptick to 30% from 18% in Q2.
In terms of employment, there is a prevailing expectation of job reductions, with 34% of CEOs foreseeing declines over the next year, compared to 28% last quarter. However, hiring intentions have stabilized, with 27% planning to expand their teams—down slightly from 28%—while a plurality of 39% aim to keep their workforce size unchanged, a drop from 44%. Although most CEOs report no considerable hiring challenges, a notable rise in difficulties in securing talent for key positions has emerged.
Salary growth appears steady, with 53% anticipating increases in the range of 3.0-3.9% in the coming year—unchanged since last quarter. Meanwhile, 21% are contemplating signs of decreased capital spending, a decline from 26% in Q2, while only 15% expect to ramp up their capital investments, down from 19%. Recently, 64% of CEOs reported no changes to their capital expenditures.
The percentage of CEOs fearing a recession has dropped to 36%, a welcome relief after the previous spikes in Q2. In terms of risks to their industries, CEOs continue to identify geopolitical instability and cyber threats as key concerns, although the apprehensions surrounding trade and tariffs seem to be easing. Most CEOs face increased cost pressures, particularly related to supplies, materials, and technology. To navigate these rising expenses, strategies centering on productivity through technology, negotiating supplier contracts, and workforce upskilling are emphasized as the primary approaches, with expectations for raising consumer prices looming large.
In conclusion, while Q3 2025 reflects an encouraging revival of CEO confidence, the overarching sentiment remains one of caution. The data reveal mixed signals, with some areas showing improvement while others underscore ongoing challenges and uncertainty as businesses prepare for the future.
While the optimism is palpable, CEOs continue to navigate various challenges. Roger W. Ferguson, Jr., Vice Chairman of The Business Council, noted that concerns regarding trade and tariff risks have declined, now ranking third among business risks faced, below geopolitical instability and cybersecurity threats. Moreover, a noticeable trend is the rising number of CEOs encountering difficulties in finding qualified talent, alongside a growing percentage planning to reduce workforce size—a trend that has been evident for the past five quarters. The current survey revealed that 34% of CEOs anticipate cutting their workforce, compared to only 27% expecting to expand, with 39% likely to maintain staffing levels.
The anticipated increase in wages is another indicator of CEO sentiment, with 61% of respondents planning to raise salaries by at least 3% over the next year—up from 58% previously. However, most CEOs have reported no changes to their capital expenditure plans, although a larger share indicated cuts in investment plans than upgrades, a trend worsening for the second consecutive quarter.
Analyzing the sources of rising cost pressures, the majority of CEOs reported issues stemming from suppliers (71%), materials (64%), and technology (63%). Wage pressures are also significant but are comparatively lower, at 47%. As a countermeasure to these escalating costs, CEOs are prioritizing technology for productivity enhancements (93%), negotiating terms with suppliers (89%), and upskilling their workforce (83%). The continued focus on implementing cost-saving measures reflects a broader strategy to mitigate financial pressures, with nearly two-thirds of CEOs also indicating the potential for increased consumer prices over the next year. Only a small fraction (19%) are prepared to absorb higher costs into their profit margins.
Current Economic Assessment
The Q3 findings reveal a marked shift in perception regarding current economic conditions. Only 34% of CEOs reported that conditions were worse than six months prior, a sharp decline from 82% in Q2. Conversely, 22% now state that conditions have improved—a significant jump from a mere 2% previously.
CEOs' evaluations of their specific industries have also rebounded, with only 38% reporting worsened conditions—down from 69%—and 18% finding improvement, up from just 7% in the previous quarter.
Future Prospects
When looking ahead, CEO expectations for economic conditions demonstrate a recovery to more neutral ground in Q3. Now, 30% project worsening conditions, down from 64%, while an equal share of 30% anticipates improvements—up from 18%. Similarly, expectations for their own industries have turned slightly optimistic, with only 25% expecting a decline, down from 51%, alongside an increase in those forecasting an uptick to 30% from 18% in Q2.
Employment Trends
In terms of employment, there is a prevailing expectation of job reductions, with 34% of CEOs foreseeing declines over the next year, compared to 28% last quarter. However, hiring intentions have stabilized, with 27% planning to expand their teams—down slightly from 28%—while a plurality of 39% aim to keep their workforce size unchanged, a drop from 44%. Although most CEOs report no considerable hiring challenges, a notable rise in difficulties in securing talent for key positions has emerged.
Salary growth appears steady, with 53% anticipating increases in the range of 3.0-3.9% in the coming year—unchanged since last quarter. Meanwhile, 21% are contemplating signs of decreased capital spending, a decline from 26% in Q2, while only 15% expect to ramp up their capital investments, down from 19%. Recently, 64% of CEOs reported no changes to their capital expenditures.
Recession Fears and Cost Management
The percentage of CEOs fearing a recession has dropped to 36%, a welcome relief after the previous spikes in Q2. In terms of risks to their industries, CEOs continue to identify geopolitical instability and cyber threats as key concerns, although the apprehensions surrounding trade and tariffs seem to be easing. Most CEOs face increased cost pressures, particularly related to supplies, materials, and technology. To navigate these rising expenses, strategies centering on productivity through technology, negotiating supplier contracts, and workforce upskilling are emphasized as the primary approaches, with expectations for raising consumer prices looming large.
Conclusion
In conclusion, while Q3 2025 reflects an encouraging revival of CEO confidence, the overarching sentiment remains one of caution. The data reveal mixed signals, with some areas showing improvement while others underscore ongoing challenges and uncertainty as businesses prepare for the future.
Topics Business Technology）
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