CEO Confidence Slips Amid Geopolitical Uncertainty [Q1 Vistage CEO Index]

One year ago, CEO confidence surged following the election, fueled by expectations of pro-business policy, easing inflation, and lower borrowing costs. That optimism faded quickly. Shifting trade policy, stubborn inflation, and wage pressure made planning difficult through most of 2025. By Q4, CEOs had absorbed the turbulence, recalibrated expectations, and were looking ahead to 2026 with a steadier hand.

What they did not factor in was a war.

The Q1 2026 Vistage CEO Confidence Index fell to 87.2, a decline of 1.7 points from Q4 2025 and the first drop after a 3-quarter climb. The survey opened March 2, just days after the conflict with Iran began, and confidence weakened as the scope of the war became clear. Despite the pullback, the Index held above its 3-year average of 83.4. The adaptability that CEOs built through 2 years of disruption has not disappeared, but plans that seemed solid in January now require a second look.

Confidence Retreats as a New Layer of Uncertainty Enters the Forecast

That the Index declined but held above its 3-year average tells you something about where CEOs stand. The turmoil of 2025 was hard, but it was not wasted. CEOs who spent the year adapting to tariff volatility, inflation, and uneven demand came into 2026 with a better footing than they had 12 months earlier. The Iran conflict disrupted a trajectory that had been building for three quarters. The full impact of the war is still unfolding, and the right response is to revisit plans with fresh assumptions, not to wait for clarity that may not arrive on a convenient schedule.

Forward-looking economic sentiment turned negative for the first time in 5 quarters. More CEOs now expect conditions to worsen over the next 12 months (29%) than expect improvement (27%), a reversal from Q4 2025 when optimists held the edge. Tariffs compound the picture. Nearly half (47%) of CEOs report being affected, citing refund complexity, stalled investment decisions, and costs that are difficult to absorb or pass on to customers. Eddie Russnow, President of MAC Products in Kearny, New Jersey, puts it plainly: “[We’re] still trying to navigate the effects of the SCOTUS decision on Trump tariffs and what’s next for us. No idea where this ends.”

ITR Economics still projects mild growth for 2026, though the trajectory softens toward year-end and into 2027. Eric Post, Deputy Chief Economist at ITR Economics, offers this perspective: “Despite this recent decline in confidence and spike in uncertainty, we still think things will look better in 2026 than they did in 2025. We are forecasting mild economic growth and tempered uncertainty for the rest of the year, paving the way for economic softness in 2027. It is and will continue to be a tricky period for business leaders to navigate, but the best path is to manage through.”

Revenue Expectations Hold as Margin Pressure Persists

Revenue expectations have held. Nearly two-thirds (65%) of CEOs expect higher sales in the year ahead, down slightly from 69% in Q4 2025. Profit expectations remain pressured. Just over half (51%) expect margins to improve over the next 12 months, while 17% expect further deterioration, up from 13% last quarter. Labor costs, insurance, and input prices continue to widen the gap between top-line growth and bottom-line results.

Pricing remains the primary response. Nearly half (45%) of CEOs plan to raise prices in the next three months, typically by 4% to 7%, with the increases aimed at offsetting rising costs rather than expanding margins. Jaime Zabala, President of Advanced Hurricane Technology, Inc. in Fort Myers, Florida, describes the pressure: “We are anticipating more fuel increases, tariff increases, and shipping increases. We have to increase prices, but only as long as the market can bear the increases.” The revenue and profit gap is not new, but it is not closing. CEOs who grow sales without addressing the cost structure risk a period of profitless prosperity.

Investment Plans Inch Forward While Workforce Expansion Cools

Fixed investment plans have strengthened gradually over the past four quarters. Nearly 2 in 5 (38%) CEOs plan to increase fixed investment spending over the next 12 months, up from 36% in Q4 2025 and 34% a year ago. The proportion of CEOs planning decreases has also eased, with just over one in ten pulling back. Capital is moving toward productivity tools and technology with near-term payback, not broad expansion.

Workforce plans have cooled slightly. Just over half (51%) of CEOs plan to increase headcount in the year ahead, down from 57% in Q4 2025. The shift reflects cost caution more than a pullback in growth expectations. Most CEOs are still hiring; 54% are filling new positions, the same proportion are backfilling attrition, and only 11% report they are not hiring at all. Meanwhile, 14% are holding some roles open, balancing added expense against near-term revenue visibility.

Sentiment about the talent market is split. Over 1 in 5 (22%) CEOs say finding qualified candidates has gotten easier compared to last year, with layoffs in the technology sector creating a stronger applicant pool for some businesses. Luis Alvarez, President of Alvarez Technology Group in Salinas, California, has seen it directly: “The volatility of the tech industry is providing us with better qualified candidates who prefer stability over the potential of future success at bigger companies.”

Skilled trades are an exception. Dennis Carignan, President of Granger Construction in Lansing, Michigan, says his firm has responded by broadening who they consider: “With fewer conventionally qualified candidates for construction, we are now more open to cross-training those looking to transition into this industry from other industries.”

Geopolitical uncertainty has CEOs resetting expectations and adjusting strategies. Download the full Q1 2026 Vistage CEO Confidence Index Report to learn more. 

Workforce Expectations Reset Against a Shifting Labor Market

Coming into Q1, talent management remained the top decision, investment, and challenge CEOs reported, and the data from the past 12 months shows why. Fewer SMBs grew their workforce (42%) than expected a year ago (45%), and more saw headcount decline (19%) than anticipated (14%). Looking forward, projections have recovered. Over half plan to grow in the year ahead, and just 9% expect declines, a meaningful improvement from where sentiment stood earlier in 2025.

Quit rates have returned to 2017 levels, easing turnover pressure. But hiring costs are still rising, which is prompting CEOs to move hiring decisions earlier in the year. Locking in talent at today’s wage rates is a hedge against wage increases ITR Economics projects throughout the year. For 48% of CEOs actively working to upgrade talent quality through attrition, the current market, with its mix of available tech workers and tight trade labor, offers a narrow window to act.

Managing Through, Not Around

A 1.7-point decline in a single quarter does not undo the momentum CEOs built through 2025. The Index is still above its 3-year average. Revenue expectations still lean positive. Investment plans are still moving in the right direction. What Q1 adds is a set of variables that require active attention rather than a steady-state plan. This data was collected in the early days of the war when the longevity and specific impacts were unclear.

ITR Economics is direct about what that attention should look like. Eric Post put it this way: “Leaders really just have to understand how their specific segment is performing and make their plans around that going forward, rather than getting swept up in what they’re seeing in the headlines.” The geopolitical disruption is real, and its effects on energy, supply chains, and customer behavior are already showing up in the data. How long those effects persist will depend on how the conflict develops. CEOs can focus on building a strategy that aligns with their segment’s reality rather than the daily shift in macro sentiment.

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

The Q1 2026 Vistage CEO Confidence Index survey was conducted between March 2 and 16, 2026, and captured input from 1,302 leaders who are active Vistage members of Chief Executive and Small Business groups in the United States.

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