Confidence among small and mid-size business (SMB) CEOs saw a slight dip in the first quarter of 2026, according to the latest CEO Confidence Index from Vistage.
The Index dropped 1.7 points in Q1 to 87.2, ending a three-quarter climb but holding above the Index's three-year average, highlighting that heightened levels of CEO uncertainty dampened revenue, profitability, and hiring expectations compared to the previous quarter.
"The fact the Confidence Index declined, but stayed above its three-year average, reflects the fact CEOs adapted to the turmoil of 2025," says Joe Galvin, Vistage's chief research officer. "Entering 2026, CEOs were prepared for a year of solid growth and a more stable economy. However, the unanticipated Iran War has left CEOs once again facing an uncertain future. While the full impact of the war is yet to be determined, business leaders must revisit their plans and remain resilient amid ongoing change."
Key takeaways:
· Tariff uncertainty is stalling decisions and squeezing margins. For those impacted by tariffs, open‑ended responses describe the biggest challenges as refund complexity, delayed investments, and unsustainable absorbed costs.
· A decline in economic optimism is dampening revenue and profitability expectations. 27% expect overall economic conditions in the United States to improve over the next year, down from 32% in Q3 and Q4 2025. Nearly two‑thirds (65%) of CEOs expect higher sales revenues in the year ahead, down slightly from 69% in Q4 2025. Just over half (51%) expect profitability to improve, a slight decrease from 53% in Q4 2025. Meanwhile, 17% expect worsening profitability, up from 13% in Q4 2025.
· CEOs are split on pricing but increasing investments. Nearly half (45%) of CEOs plan to raise prices in the next three months. Meanwhile, half (50%) expect pricing to remain the same in the near term and just 3% plan to decrease prices. 38% plan to increase fixed investments over the next 12 months, up slightly from 36% last quarter and 34% last year.
· Workforce expansion plans have seen a slight cooling. Just over half (51%) of CEOs plan to increase headcount in the year ahead, down from 57% in Q4 2025. Over half (54%) are hiring for new positions while the same proportion (54%) are backfilling based on attrition. 14% are delaying hiring or holding roles open as they balance expenses with revenue expectations. Over one in five (22%) say finding qualified talent is easier compared to last year, while 13% say it's harder, and the majority (65%) report no meaningful change. Analysis of open-ended responses reveals that layoffs at larger companies are creating a talent pool for some SMBs.
· AI is beginning to reshape hiring decisions, albeit slowly. One-third (34%) of CEOs are evaluating how to incorporate AI into hiring and 22% are prioritizing internal upskilling for AI skills. Still, two in five (39%) do not currently factor AI into hiring decisions. This is likely more indicative of the types of roles they are hiring for, rather than whether they view AI as a requirement of employment.
· Just 6% include AI skills as a requirement in job postings and the same (6%) formally evaluate AI skills, while one in five (21%) assess them informally in interviews.
