Small and midsize business (SMB) CEO confidence decreased slightly to 83.3 in Q2 2024, according to the latest CEO Confidence Index released by CEO coaching and peer advisory organization Vistage.
The dip in CEO confidence occurred after four consecutive quarters of gains, driven by a decrease in economic optimism. Nearly two-thirds (64%) of CEOs report higher interest rates are impacting their business, directly affecting profitability.
"It's not swimming, but it's not drowning is the best way to describe CEO's wavering confidence," says Joe Galvin, Vistage's chief research officer. "CEOs, however, are not treading water while waiting for the economy to spark. Instead, they are focused on improving productivity internally to counteract external economic hardships. Our data shows there are four strategies that CEOs are implementing across the board: utilizing AI and automation, enhancing training and development, implementing technologies to streamline processes, and improving employee engagement and culture."
Key Takeaways:
Economic pessimism among CEOs increases.
- The number of CEOs reporting economic improvement over the past year fell to 18% in Q2, compared to 26% in Q1 2024.
- 23% of CEOs expect the economy to improve in the next year, down from 26% the prior quarter.
- Inflation and interest rates are impacting businesses.
- 64% of SMBs reported that they are feeling the impacts of higher interest rates.
- CEOs cited labor as the biggest source of inflation (59%).
- Raw materials were the second biggest source of inflation at 12%.
AI is no longer the future of the workplace; it is in the present.
- 30% of CEOs are increasing spending in AI, with another 12% redirecting existing budgets towards AI.
- 55% are making no changes to their AI spending, which corresponds to the 55% who are also not adjusting staff or training because of AI.
- When asked about how AI is impacting their hiring:
- 32% of CEOs say they are training staff.
- 8% of CEOs say they are hiring new talent.
- 6% of CEOs say they are creating new roles or teams.
- 11% of CEOs say they are redefining job roles.
