Economic Optimism among Small and Midsize Businesses Improves in Q4 after Turbulent Year, but Just 16% Expect Improved Economic Conditions in the Year Ahead. 2020 Could Be Even More Extraordinary with Impeachment and an Election Looming Large.

SAN DIEGOJan. 9, 2020 /PRNewswire/ — Confidence in the economy among small and midsize business CEOs rose to 91.5 in Vistage’s Q4 2019 CEO Confidence Index. The mark is up from 85 in the previous quarter, a 7.7% increase, and the survey regained losses from the prior two quarters to end the year at the same favorable level as the beginning of 2019. The mark still trails the optimism business leaders felt at the same time last year when the index registered at 95.4, and the recent peak of 110.3 at the close of 2017. Despite the recovery, just 16% of CEOs expect improved economic conditions in the year ahead, the highest since 25% was recorded in the third quarter of 2018. And still, hiring plans remain strong for the year ahead. 63% of CEOs plan to expand their workforce, up from last quarter’s 57% and just below last year’s 65%.

“Needless to say, the economy is heading into an extraordinary year that will start with a Senate impeachment trial and end with an election that will determine a record expansion in federal spending and taxes,” said Dr. Richard Curtin, research associate professor at the University of Michigan, who analyzed the data.

The rebound in the fourth quarter of 2019 is minimal, but it points toward the expectation that expansion will continue during 2020, even if at a slower pace. 27% of CEOs reported recent gains in economic conditions in Q4 2019, up from last quarter’s 21%, but well below the Q4 2018 mark of 44%. Worsening economic conditions are anticipated by 29% of CEOs in the latest survey, down from 39% last quarter and below last year’s 33% during the same quarter.

Revenue and profit outlooks improved as well with 67% of CEOs expecting increased revenues, up from 61% last quarter and almost matching the 70% recorded in Q4 2018. Profit increases are expected by 57%, a moderate gain from 51% in the prior quarter and below last year’s 61%, with just 12% anticipating declines in profit. 44% of CEOs report that their prices will increase. Importantly, price increases could be due to rising costs, including those associated with tariffs and company paid healthcare; 29% have raised prices to mitigate the rising cost of healthcare and 37% said tariffs are negatively impacting their business.  The most recent tariff news about a pending trade deal with China, announced just after the survey concluded, should brighten CEOs’ outlooks.

“The latest Vistage CEO Confidence Index rose for the first time since Q4 2018, suggesting the end of the current business cycle as the economic slowdown slows down,” said Joe Galvin, Chief Research Officer for Vistage. “Of the six factors that comprise the Index, five bounced off their Q3 2019 lows. The highlights in Q4 include growing expectations for increased revenues (67%) and increased profits (57%). The direction of the economy is a continued concern, with just 16% of CEOs expecting improved conditions in the year ahead.”

Survey highlights include:

  • Small Rebound in Prospects for the Economy
    • While just 16% of CEOs expect improved economic conditions in the year ahead, this is the highest level since 25% was recorded in the third quarter of 2018.
    • 29% anticipate worsening economic conditions, down from 39% in Q3 2019 and below the 33% recorded in Q4 2018.
    • The proportion of CEOs that reported recent economic gains in economic conditions rose to 27%, but was well below last year’s 44%.
  • Revenue and Profit Outlook
    • 67% expect increased revenues and just 8% of all businesses anticipate declines in total revenue in the year ahead.
    • Profit increases were anticipated by 57%. Just 12% of all CEOs anticipate profit declines.
    • 44% of CEOs report that their prices will increase.
    • 70% of CEOs said offering affordable health care for employees was challenging.
      • 29% said they have raised prices to mitigate the rising cost of healthcare.
    • 37% of CEOs said tariffs are negatively impacting their business.
  • Hiring Plans Remain Strong
    • Hiring plans have remained relatively strong during the past year, with workforce expansion planned by 63% of all businesses.
      • Just 5% of businesses are planning reductions.
  • Investment Strategies
    • 42% of CEOs anticipate an increase in expenditures for new fixed investments.
    • CEOs reported that the goals for investments in new technologies are to:
      • Position themselves as innovators and leaders in their fields
      • Enhance their ability to gain and keep customers
      • Lower costs by streamlining operations and procedures
      • Improve productivity
      • Attract and retain employees
      • And to reduce overall costs

Read the full results and download 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 Q4 2019 Vistage CEO Confidence Index includes responses from 1,604 U.S. CEOs, surveyed between December 2 and December 9, 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.

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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