CEO Confidence Plummets Amid Tariffs Mandates: Study

Small and mid-size business (SMB) CEOs' confidence in the economy decreased significantly in Q1, according to the latest CEO Confidence Index from Vistage.

The Index plummeted a historic 22 points from the previous quarter, from 100.8 to 78.5. This sharp decline is primarily driven by growing concerns over tariffs and heightened inflation.

"CEO confidence took a significant hit in Q1 2025, a stark juxtaposition to the gains we saw in Q4," says Joe Galvin, Vistage's chief research officer. "While such a drop would typically raise alarm bells, it brings levels back near those seen in Q3 2023. The high confidence in the previous quarter was likely driven by optimism about what the new administration might accomplish, while the current reading reflects the reality of ongoing economic challenges. This uncertainty, along with tariffs and growing concerns among consumers, is leading to a more cautious outlook for the U.S. economy."

Key takeaways:

• When asked how overall economic conditions have changed over the past year, 41% of SMB CEOs report that conditions have worsened, and 42% expect the economy to continue to worsen in the year ahead.

• 69% of CEOs said trade and tariff policy changes will negatively impact their businesses.

• Despite the current economic environment, 45% of CEOs plan to add personnel in the year ahead.
• However, 14% of CEOs intend to reduce hiring. Since the survey began in 2003, the only other times this figure rose as high was during the pandemic in 2020 and the recession in 2008 and 2009.
• When asked about the potential effects of changes in government spending, 10% of CEOs expect direct impacts, such as cuts in government orders, contracts, or grants; 32% anticipate indirect impacts, such as cuts to customers' or vendors' government-related contracts; and 20% foresee both direct and indirect impacts

• 44% have increased their prices since the beginning of the year, and 51% plan to implement price increases in the next three months. Of those increasing prices, 13% are planning hikes of more than 10%.

• 70% of CEOs and 61% of leadership teams are actively using AI in their operations. In comparison, 55% of individual employees are utilizing AI.
• 47% of CEOs are leveraging training to ensure their employees effectively use GenAI.