Small and midsize business (SMB) CEO confidence declined more than 36% in the second quarter of 2022 when compared to the year prior, per the latest CEO Confidence Index from Vistage, a CEO coaching and peer advisory organization.
Vistage's CEO Confidence Index, which has measured SMB leaders' sentiment regarding a variety of economic and business factors each quarter since 2003, dropped to 69 in Q2, down from 84.3 in Q1 2022 and 108.8 in Q2 2021, but still above the pandemic shutdown in Q2 2020 (65.5) and the Index's all-time-low during the Great Recession in Q4 2008 (48.7).
The marked drop in confidence is accompanied by a sharp increase in concern about current and future economic conditions: 64% anticipate worsening economic conditions in the year ahead and 68% believe that the national economy has already worsened.
"The only thing that remains certain for small business CEOs in the year ahead is more uncertainty," said Joe Galvin, Vistage's chief research officer. "With concerns of potential recession or stagflation on the horizon, we anticipate CEOs' confidence will continue to diminish in the months ahead. However, we do see a bright light in the form of hiring; while it has slowed from the white hot, post-pandemic surge, an overwhelming majority are either still looking to hire or keep headcount the same, regardless of widespread pessimism about economic conditions."
Bottoming levels of optimism, amid declines in revenue and profit
Hiring plans have softened, but talent shortages persist
Steep decreases in planned investments, as inflation persists
38% of SMB CEOs plan to increase their investments in plants and equipment in the next 12 months (down from 45% last quarter and 52% two quarters ago).
When asked about which effects of inflation are impacting their business:
Remote work remains a challenge for leaders
50% of SMB CEOs report their current workforce is hybrid; 7% say it's all-remote