Economic Optimism among Small and Midsize Businesses Returns to Pre-Pandemic Levels

CEOs making hiring plans despite being realistic about slower timing and pace of recovery

SAN DIEGO, JANUARY 13, 2021 – Confidence in the economy among small and midsize business CEOs rose to pre-pandemic levels, scoring an 88.0 in the Q4 2020 Vistage CEO Confidence Index, up from the low of 65.5 recorded in Q2. However, economic fallout due to COVID-19 is still on the forefront of SMBs’ minds nationwide, with 76% of respondents saying the economy recently worsened.

“Despite the strong overall gain, few CEOs believe the current state of the economy had recovered to anywhere near last year’s performance. Importantly, CEOs held much more favorable expectations about the outlook for the national economy, although the pace of those expected gains has significantly slowed. Moreover, the country now faces a horrendous increase in COVID-19 infections and deaths as well as the arrival of vaccines that could eradicate the viral threat over the next year. Renewed lockdowns and other restrictions on businesses in the months ahead could worsen conditions before they experience a lasting and robust recovery,” said Dr. Richard Curtin, research associate professor at the University of Michigan, who analyzed the data.

The spread of COVID-19 continues to postpone economic recovery, with most CEOs anticipating that recovery will take at least six more months. Just over half (51%) of CEOs expected recovery would take greater than six months in Q2 2020, a figure that increased to 59% in Q3 and held steady at 58% in Q4. The most promising indication that small and midsize businesses are preparing for a robust recovery is their more expansive plans for hiring and fixed investment spending, both of which posted significant fourth quarter gains, restoring these plans to their pre-pandemic levels.

While there is still some uncertainty about the recovery of the economy, hiring plans are extremely optimistic for the next year with 64% of CEO’s planning to expand their workforce in the next 12 months, a 12-point increase from Q3. Forty percent also say they are looking to increase investment expenditures in the next year, up from 36% in Q3.

“While news of multiple successful vaccines gives small businesses hope for the next year, the impacts of COVID will be felt for a while,” said Joe Galvin, Chief Research Officer at Vistage. “2021 will be a rebuilding year with businesses beginning to hire and invest again in hopes of growing their business.”

When asked how long their cash reserves would last, the same underlying pattern emerged:  the proportion of firms who said their cash reserves would last for six months or longer was nearly identical from the 3rd quarter (66%) to the 4th quarter (67%) surveys. “The new stimulus package should help those SMBs that have been hardest hit,” said Galvin.

Survey highlights include:

  • Economic Recovery
    • 76% of CEOs believe the economy has worsened compared with a year ago.
    • 59% believe the economy will improve in the next 12 months and 24% believe it will remain the same.
    • 67% believe that their firm’s sales revenues will increase in the next 12 months and 55% believe their firm’s profitability will improve.
    • 64% expect their total number of employees will increase and 29% believe it will remain the same.
  • COVID-19
    • 22% of CEOs say their revenues have increased due to the Coronavirus pandemic and 64% say it has decreased.
    • 40% of respondents say their cash reserves will last more than a year and 27% say they will last 6-12 months.
    • 43% say that the economy will begin to recover in the next 6-12 months.
    • With COVID-19 cases on the rise, 62% say they are taking steps to address workplace safety by communicating expectations for employee behavior outside of the workplace.

Read the full results.

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 2020 Vistage CEO Confidence Index includes responses from 1,519 U.S. CEOs, surveyed between December 7 and December 14, 2020. 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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