CEO confidence plunges in Q2; biggest concerns are…
The mood of U.S. chief executives darkened in the second quarter, with geopolitical instability, tariffs, recession fears and regulatory ambiguity weighing on their confidence.
The Conference Board Measure of CEO Confidence, in collaboration with The Business Council, fell by 26 points in the second quarter of 2025 to 34, the lowest level since the fourth quarter of 2022. This was the largest quarter-over-quarter decline in the history of the survey, which started in 1976.
“CEO Confidence collapsed in Q2 2025 after surging in Q1,” said Stephanie Guichard, senior economist, global indicators, The Conference Board. “All components of the measure weakened into pessimism territory. CEOs’ views about current economic conditions led the plunge, registering the largest quarter-on-quarter decline in almost 50 years. “
Expectations for the future also plummeted, with more than half of CEOs now expecting conditions to worsen over the next six months, both for the economy overall and in their own industries. CEOs’ assessments of current conditions in their own industries — a measure not included in calculating the topline Confidence measure — also fell sharply.
The CEOs ranked geopolitical instability (59%), trade and tariffs (58%) and legal and regulatory uncertainty (53%) as top concerns for their industry. Other business risks were cyber (51%), financial and economic risks (50%) and AI and new technology (45%).
The vast majority of CEOs (83%) said they expect a recession in the next 12 to 18 months, nearly matching the percentage who feared recession in late 2022 and early 2023. The U.S.–China trade deal announced on May 12 seems to have eased, but not removed, concerns about the future.
“CEOs responding before and after May 12 reported similar very negative views about the current state of the economy and their own industries,” said Guichard. “However, the CEOs who responded after May 12 tended to be somewhat less pessimistic about the future and fewer expected a deep recession.“
CEOs named geopolitical instability, followed by trade and tariffs, as the two top business risks impacting their industry in the second quarter. Regulatory uncertainty followed close behind, while cyber risks — which dominated CEOs’ concerns over the past two years — dropped down to fourth place.
“As in previous quarters, a majority of CEOs indicated no revisions to their capital spending plans over the next 12 months. Roger W. Ferguson, Jr., vice chairman of The Business Council and chair emeritus of The Conference Board. “Still, consistent with more pessimism about the outlook in their own industries, the share of CEOs expecting to revise down investment plans doubled in Q2 to 26%, while the share expecting to upgrade investment plans dropped 14 ppts to 19%. These changes were largely driven by those who responded before May 12.”
Workforce
Most CEOs anticipated no change in the size of their workforce over the next 12 months, which may reflect ongoing labor shortages and/or increased uncertainty. The share of CEOs expecting to expand their workforce fell slightly to 28% — down from 32% in the first quarter — while the share of CEOs planning to reduce their workforce ticked up 1% to 28%.
In related findings, more CEOs reported no difficulty finding qualified workers in the second quarter versus the first. The share of CEOs planning to raise wages by 3% or more over the next year fell sharply to 58% — down from 71% in the first quarter. CEOs who responded before May 12 were on average planning smaller wage increases than those who responded after May 12.
A total of 133 CEOs participated in the second-quarter survey, which was fielded from May 5 to May 19.
Specifics from the report are below.
Current Conditions
CEOs’ assessment of general economic conditions collapsed in the second quarter of 2025:
- 82% of CEOs said economic conditions were worse than six months ago, up from just 11% in Q1.
- Only 2% said economic conditions were better, down significantly from 44%.
CEOs’ assessments of conditions in their own industries also flipped to negative in Q2:
- 69% of CEOs said conditions in their own industries were worse than six months ago, up from 22% in Q1.
- Only 7% said conditions in their industries were better, down from 37%.
Future Conditions
CEOs’ expectations about the short-term economic outlook dropped sharply in Q2 after surging last quarter:
- 64% of CEOs expected economic conditions to worsen over the next six months, up from 15% in Q1.
- Only 18% expected economic conditions to improve, down from 56%.
CEOs’ expectations for short-term prospects in their own industries also became far more pessimistic in Q2:
- 51% of CEOs expected conditions in their own industry to worsen over the next six months, up from 14%.
- Just 18% expected conditions in their own industry to improve, down from 52% in Q1.
Employment, Recruiting, Wages and Capital Spending
- Employment: 44% of CEOs planned to maintain the size of their workforce. The share of CEOs expecting to increase their workforce declined from 32% to 28%, and there was a slight increase in the percentage expecting a net reduction from 27% to 28%.
- Hiring Qualified People: Labor shortages continued to ease, with more CEOs reporting no problems hiring.
- Wages: A majority of CEOs (53%) planned to increase salaries by 3.0–3.9% over the next 12 months, but those considering wage increases in the 2.0-2.9% range increased from 24% to 34%.
- Capital Spending: The share revising spending plans down doubled to 26% in Q2 from 13% in Q1, and the share increasing their spending plans fell to 19% in Q2 from 33% in Q1.
