CEO Confidence Enters 2026 with Measured Optimism [Q4 Vistage CEO Index]

Often, heightened optimism gives way to a phase of adjustment as expectations meet reality. One year ago, CEO confidence surged as post-election optimism fueled expectations of pro-business policies, easing inflation, and lower borrowing costs. That enthusiasm faded quickly. Shifting trade policy, rising costs, and uneven demand made planning difficult, sharply lowering confidence in early 2025 before it gradually stabilized.

That context matters as the Q4 2025 Vistage CEO Confidence Index shows a modest but meaningful improvement. Confidence rose to 88.9, an increase of 7 points from last quarter. More notably, this is also nearly 7 points above the 3-year average. This increase does not signal a return to euphoria. Instead, it reflects a growing acceptance of the conditions CEOs expect to face and a clearer view of both risks and opportunities for their business heading into 2026.

CEO Confidence Improves as Leaders Adjust to a New Operating Reality

Looking back, CEOs remain pessimistic about U.S. economic conditions compared with a year ago, reflecting sentiment before the new administration took office. Forty percent believe that current economic conditions are worse than a year ago, while just over 1 in 5 report improvement.

Forward-looking expectations are less pessimistic, with less than 1 in 4 CEOs (23%) expecting economic conditions in the U.S. to worsen in the next 12 months. Additionally, the proportion of CEOs expecting improvements to economic conditions has grown to nearly one-third (32%).

Overall confidence is on the rise, not because macroeconomic conditions are stronger, but because uncertainty has become more familiar. Leaders have recalibrated expectations, moving away from reacting to headlines and social media posts and waiting for policy clarity and toward operating within a range of outcomes they can manage. Our data reveal that CEOs increasingly acknowledge that opportunities for their businesses are separate from macroeconomic trends.

“Things will look better in 2026 than they did in 2025,” said Lauren Saidel-Baker, CFA, a senior economist at ITR Economics. “A lot of that uncertainty is now behind us, and we can move off those lows and into growth — but this is a slow build in momentum, not flipping a switch.”

ITR Economics perspective helps explain why confidence is rising even as caution persists. Improvement is expected, but gradually, as leaders plan for progress rather than a rapid rebound.

Decisions and Growth Expectations Begin to Take Shape

As sentiment stabilizes, CEOs are sharpening their focus on the decisions that will shape performance in 2026. Revenue expectations are a key driver of confidence, with nearly seven in ten CEOs anticipating higher sales in the year ahead, a 9-point improvement from Q3. Profitability expectations have also improved, though to a lesser extent, reflecting continued pressure from wages, rising insurance costs, and supplier pricing.

The gap between revenue optimism and profit expectations is influencing decision-making. Growth alone is unlikely to resolve margin pressure. Instead, CEOs are prioritizing decisions around people, pricing, strategy, and technology — choices that emphasize execution over expansion.

Investment Priorities Reflect Discipline and Focus

Investment plans reinforce this measured approach. While the proportion of CEOs who plan to increase fixed investment spending has risen marginally, half expect investment levels to remain unchanged. Capital allocation in the year ahead will reflect discipline rather than hesitation, with spending directed toward resilience and building long-term capability.

When asked about top investments for the year ahead, CEOs reported people and talent were their lead investment priorities for 2026, followed closely by technology and business development. Artificial Intelligence is increasingly embedded in these decisions. Rather than funding sweeping transformation efforts, AI investments reported by CEOs are concentrated on tools, training, and workflow support that improve productivity and extend the capacity of the existing workforce. It is critical that AI efforts align with the organization’s greatest pain points and highest priorities, and CEOs need to manage and communicate that expectation.

Persistent Challenges Shape Workforce and Technology Choices

Despite improving confidence, CEOs remain very conscious of the challenges their businesses face. Hiring, staffing, and retention continue to top the list of CEO challenges, reflecting labor shortages, skill gaps, and wage pressure. Economic uncertainty and margin pressure remain close behind, reinforcing cautious planning.

At the same time, workforce expansion plans have strengthened, with 7% planning to increase their workforce. As finding qualified employees remains a challenge in the tight labor market, an increasing number of CEOs are sourcing talent globally: 38% currently use employees (15%) or contractors (23%) outside the U.S., and an additional 5% plan to do so in the future.

AI has not displaced the need for people. Instead, it is reshaping how work gets done and which capabilities matter most. Demand for digitally engaged employees continues to rise, and training and governance are necessary investments of time and resources.

From Adoption to Alignment: AI Enters the Decision Framework

AI usage is now widespread across small and midsize businesses. More than three-quarters (76%) of CEOs report personal use of generative AI, indicating that they find it impactful for improving strategic thinking and decision-making, accelerating research and analysis, and streamlining communication and administrative work.

Digital engagement is increasing across leadership teams, functional areas, and individual employees. Adoption has outpaced formal strategy, creating a gap between experimentation and execution that CEOs must address this year.

“I use it daily as my thought partner to help me solve things I am stuck on as well as to poke holes in some of my strategy,” says Eddie Russnow, president of MAC Products, Inc. in Kearny, New Jersey. “I also use it when it is embedded in Word, Excel, Teams, etc. Recordings of meetings with AI notes and transcripts are a game-changer for me, so I do not have to take manual notes.”

For 2026, the challenge for CEOs will be alignment as they integrate AI into strategic plans, evaluate governance structures, and implement training programs. However, CEOs must recognize that isolated productivity gains will not deliver sustained advantages. As AI adoption increases, SMBs also need to remain vigilant against heightened cyber risk and to update their cyber-risk strategies.

Entering the new year, this uptick in CEO confidence reflects hard-earned experience. After a year of uncertainty, decisions for the year ahead have become clearer, investments more targeted, and challenges better understood. While growth is expected, it will be gradual, and CEOs must expect trade-offs and focus on executing their strategic plans. The shift from reacting to volatility to making deliberate choices within it may make their optimism more durable and steadier than last year.

To explore the full Vistage CEO Confidence Index survey dataset, view the infographic and visit our data center.

The Q4 2025 Vistage CEO Confidence Index survey was conducted between December 2 and 16, 2025, and captured input from 1,202 leaders who are active Vistage members of Chief Executive and Small Business groups in the United States.