Small and Midsize Business Confidence Stabilizes Following Pandemic Volatility

Vistage marks 20th anniversary of its CEO Confidence Index by announcing new partnership with ITR Economics

SAN DIEGO, July 12, 2023 /PRNewswire/ — Small and midsize business (SMB) CEO confidence in the economy stabilized during Q2 2023, following nine quarters of pandemic-driven economic volatility, according to the latest CEO Confidence Index from CEO coaching and peer advisory organization Vistage. The Q2 2023 Vistage CEO Confidence Index rebounded to 74.2, a modest rise from 72.6 in Q1 2023, with the last four quarters moving upward within a 2.7 point range.

“In the wake of gloomy economic sentiment, CEO confidence has fallen well below pre-pandemic norms as business leaders brace for a slowdown. The post-COVID reality has landed and established a new baseline — 24 points below the 10-year (2010 to 2019) average of 98 points,” said Joe Galvin, Vistage’s chief research officer. “However, current hiring levels remain significantly higher than those observed before the pandemic, underscoring the persistent strength of the labor market in the face of economic negativity.”

Vistage has measured SMB CEO sentiment on a variety of economic and business factors on a quarterly basis since June 2003 — making this its 20th year since its inception. Over the past two decades, the Vistage CEO Confidence Index has tracked CEO sentiment through boom and bust cycles, inflation, the collapse of the housing bubble, tariffs, the pandemic, global economic uncertainty, and debt limits, among other economic hurdles.

The Vistage CEO Confidence Index has earned its standing as a barometer of the perspectives and projections from CEOs of small and midsize businesses. In fact, ITR Economics’ rate-of-change methodology has confirmed the Vistage CEO Confidence Index is a leading indicator of the U.S. Industrial Production Index nine months in advance. Now entering its 20th year, Vistage is collaborating with ITR Economics to introduce a new methodology for analysis of the Vistage CEO Confidence Index.

“We are thrilled to announce this collaboration with trusted industry leader ITR Economics as we enter the third decade of the quarterly Vistage CEO Confidence Index,” Galvin commented. “This new partnership will further our efforts to provide actionable research that enables small and midsize business CEOs to become better leaders, make better decisions and deliver better results.”

“We’re excited to partner with Vistage to uncover deep and meaningful insights that can help CEOs make smarter decisions, leveraging ITR’s advanced methodology for analysis. Through this collaboration, we’ll provide data-driven economic intelligence to help CEOs reduce risk and drive practical and profitable business decisions,” said Jackie Greene, Vice President of Economics at ITR Economics.

Q2 2023 Vistage CEO Confidence Index highlights include:

AI is rising in popularity amongst SMBs.

43% of SMB CEOs report they are currently using or testing Open and Regenerative AI, such as ChatGPT, with an additional 21% reporting plans to use or test it in the near future.
Despite the rising popularity of AI, 33% of CEOs report they are not officially using or testing Open and Regenerative AI such as Chat GPT.
Just 1% have mandated employees not to use AI.
When asked about how their business is currently leveraging AI:

Half (51%) are using it for customer engagement (sales and marketing)
39% are using it for business operations
18% are using it for talent management and hiring
9% are using it for financial reporting

When asked about anticipated impacts of AI applications on personnel:

Just over half (54%) do not anticipate an impact to personnel
36% anticipate training existing personnel to use AI
14% anticipate hiring new personnel who are already skilled in AI
12% anticipate reducing personnel for AI
5% anticipate replacing existing personnel with those with AI experience

CEO profitability and revenue projections are decreasing.

Just half (50%) of SMB CEOs expect increased revenues in the year ahead (below last quarter’s 55%.)
42% anticipate higher profits in the year ahead, just below last quarter’s 43%.

SMBs’ plans to hire remain unchanged, despite pessimistic economic outlook.

75% of SMB CEOs report they have no plans to reduce workforce and 57% say they have no plans to delay hiring in the year ahead.
48% expect to increase hiring this year (slightly below last quarter’s 54%.)
Just 8% expect their workforce to decrease, a figure that has been stable for the last five quarters.

See the full results for the Q2 2023 Vistage CEO Confidence Index at vistage.com/ceoindex.

About the Vistage CEO Confidence Index: Celebrating 20 Years

Established in 2003, the Vistage CEO Confidence Index has surveyed small to midsize business CEOs, presidents, and business owners about the U.S. economy each quarter for 20 years. The Q2 2023 Vistage CEO Confidence Index includes responses from 1,265 U.S. CEOs, surveyed between June 5 and 12, 2023. Using ITR Economics rate-of-change methodology, analysis has revealed that the Vistage CEO Confidence Index is a leading indicator of the U.S. Industrial Production Index, 9 months in advance.

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 non-members with comparable small and midsize businesses saw revenue decrease by 4.7%, according to a study of Dun & Bradstreet data. Learn more at vistage.com.