Economic Optimism among Small and Midsize Businesses Continues to Decline According to the Q3 2019 Vistage CEO Confidence Index. Optimism falls to new 8 year low as CEOs expect a slower pace of economic growth for the year ahead.

SAN DIEGOOct. 3, 2019 /PRNewswire/ — Confidence in the economy among small and midsize business CEOs continues to decline, falling to 85.0 in the Q3 2019 Vistage CEO Confidence Index. The mark is down from 88.4 in the previous quarter, and the current reading is at the lowest level since Q3 2011 when the Index was recorded at 83.5. The falloff continues to be driven by less favorable assessments of the national economy. While this decline does not indicate that CEOs anticipate a recession, leaders have expressed even greater pessimism about the outlook for the economy in the year ahead, with 39% expecting the economy to worsen, the highest proportion since the closing quarter of 2008.

“There are a number of domestic and international issues, like tariffs, whose favorable resolution could push confidence higher in the months ahead. At present, however, uncertainty about how and when these issues will be resolved will continue to erode confidence,” said Dr. Richard Curtin, research associate professor at the University of Michigan, who analyzed the data. “With the continued decreased confidence in the economy, firms have embraced a precautionary outlook which will make their forward planning more defensive rather than expansive.”

Pessimism is at an all-time high with only 12% of all CEOs surveyed expecting improved conditions in the year ahead. In addition, just 21% indicated that economic conditions have recently improved, down from 31% last quarter, and a mere one-third of the 64% recorded a year ago. Sentiment about the economy is softening the view in prospects for their own business as 61% of those surveyed expect increased revenues—the lowest response since 2009 and well below last year’s 75%.

Hiring plans remain strong and workforce expansion was the only factor in the Index that posted an increase in the Q3 survey, with 57% of all firms planning to add new employees to their workforce. 76% rated retaining existing talent as “very important,” an increase from last quarter’s 70%.

“Uncertainty continues to impact small and midsize businesses, yet the fact that hiring and retaining top talent continues to be a priority is an indicator of cautious confidence,” said Joe Galvin, Vistage’s chief research officer.

Survey highlights include:

  • Economic prospects worsen
    • Just 21% of all CEOs reported that economic conditions had recently improved, down from 31% last quarter, and one-third of the 64% recorded a year ago.
    • Firms have expressed even greater pessimism about the outlook for the economy in the year ahead: 39% expected the economy to worsen, the highest proportion since the closing quarter of 2008.
      • Just 12% expected improved conditions in the overall economy, hardly changed from last quarter’s 13%, and the lowest level since late 2008. It should be noted that in comparison to the 39% who currently expect the economy to worsen, when the last recession started, the proportion who expected worsening economic conditions stood at 51%.
  • Revenue and profit outlook
    • Increased revenues were expected by 61% of all firms in the 3rd quarter, marginally below last quarter’s 64%, but well below last year’s 75%; this was the lowest reading since 2009.
    • Just 10% anticipated revenue declines, which was held down in part due to the 44% who expected to raise prices for their products or services.
    • Profit increases were anticipated by 51%, just below last quarter’s 54% but below last year’s 61%.
    • 14% of all firms anticipated outright declines in profits during the year ahead.
      • 41% noted that tariffs are having a negative effect on their business, with 33% saying they were directly affected by the new tariffs put in place on September 1, 2019.
  • Hiring and investment plans
    • Just 5% expect to reduce their workforce, down from 7% last quarter. Although workforce expansion plans are still below last year’s level, the current levels indicate that firms have only marginally reduced their efforts to increase personnel, despite having to offer higher competitive wages (37%), cost of living increases (17%), performance based raises (15%) and steps to increase retention (21%).
    • Adding new employees to their total workforce was anticipated by 57% of all firms. While only marginally above last quarter’s 56%, this was the only component to post an increase in the Q3 survey.
      • 37% said that wage increases were implemented to attract qualified talent.
    • 37% of CEOs are planning increases in expenditures for new fixed investments, down from 40% last quarter.
    • Few firms planned cutbacks in investment spending (12%), with most firms keeping the level of investment expenditures largely unchanged (50%).

Read the full results and the infographic.

About the Vistage CEO Confidence Index
The Vistage CEO Confidence Index, established in 2003, is a quarterly survey of small to midsize business CEOs, presidents, and business owners about the U.S. economy. The Q3 2019 Vistage CEO Confidence Index includes responses from 1,518 U.S. CEOs, surveyed between September 9 and September 16, 2019. Since its establishment in 2003, the Index has proven to be a reliable indicator for changes in GDP and employment, two to three quarters hence. Download the full Vistage CEO Confidence Index history.

About Vistage Worldwide, Inc.
Vistage is the world’s largest CEO coaching and peer advisory organization for small and midsize businesses. For more than 65 years, we’ve been helping CEOs, business owners and key executives solve their greatest challenges through confidential peer groups and one-to-one executive coaching sessions. Today, more than 45,000 members in 35 countries rely on Vistage to help make better decisions for their companies, families and communities. The results prove it: Vistage CEO members grew their annual revenue on average by 4.6% in 2020, while nonmembers with comparable small and midsize businesses saw revenue decrease by 4.7%, according to a study of Dun & Bradstreet data. Learn more at

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