Vistage, the world’s leading business performance and leadership organisation for SMEs, has released its CEO Confidence Index for Q2 2025.
The report, based on responses from business leaders across the UK and Ireland, reveals rising concern over the UK’s declining post-Brexit competitiveness, limited enthusiasm for the UK-EU youth mobility scheme, and growing challenges around AI adoption.
However, despite challenges, 55% of SMEs still anticipate sales revenue growth in the next 12 months.
Rising to 89.5 in Q2 2025 (from 87.5 in Q1), the Vistage CEO Confidence Index indicates growing confidence among small and midsize business leaders.
Despite ongoing economic and geo-political challenges, many business leaders remain optimistic, with over half (55%) expecting higher sales in the next year. However, fewer are confident about profitability, as only 43% predict improvements. Investment plans reflect this cautious outlook, with around 31% planning to increase fixed investments, while 27% expect to cut back.
Rising costs are also a concern, with more than a third (34%) of businesses planning to raise prices in the next three months. Of those, 55% are aiming to increase prices by between 4% and 6%.
The survey shows growing concerns about the UK’s trade position, with over half of business leaders saying the country is falling behind compared to EU and global competitors. Just 8% believe the UK is becoming a more competitive trade hub, a number that reflects wider uncertainty highlighted throughout the report, where only 1 in 10 businesses are actively planning to expand into the EU market.
Regarding recent UK-EU trade developments, businesses are taking a cautious stance with limited immediate action. Nearly 40 per cent are reassessing EU opportunities but have yet to make firm decisions, while more than a third (38%) report the deal has had no impact on their strategic plans.
The recently proposed UK-EU youth mobility scheme also appears to have limited appeal among SME leaders, as nearly half (46%) of SMEs say it will make little to no difference to their hiring needs. Moreover, only 5% believe it will significantly help address talent shortages.
The pressure of navigating economic uncertainty is taking its toll on business leaders, with nearly one in five CEOs rating their work-life balance as poor. More concerning, 43% report occasional burnout, with 20% experiencing this frequently.
The inability to disconnect remains a significant issue, with nearly 60% struggling to fully switch off during time off, and only around one in four saying they’re able to completely disconnect when they take breaks.
Despite growing recognition of AI’s potential, SME leaders face significant implementation hurdles, with talent shortages emerging as the primary obstacle. The survey reveals multiple barriers preventing businesses from embracing AI technology including:
- Skills and talent gap: Nearly half of businesses (44%) say they lack the technical expertise needed to implement AI effectively.
- Lack of clear strategy: Similarly, 43% of businesses say they’re struggling to adopt AI because they don’t have a clear strategy or roadmap in place.
- Internal resistance to change: A quarter of SME leaders say employee reluctance is slowing down the adoption of new technologies like AI.
Rebecca Drew, Managing Director, Vistage UK and Ireland said: “Our Q2 findings reveal a nuanced landscape for UK SMEs. While many leaders are grappling with uncertain economic conditions, they maintain a cautious optimism about individual prospects. In the face of geopolitical uncertainty, particularly concerning international and EU trade expansion, few are ready to commit to expansion.
“At the same time, the challenges around AI adoption underscore a wider and more urgent talent gap that must be addressed to maintain long-term competitiveness on the global stage. At Vistage, these are the kinds of issues we hear about every day in conversations with business leaders – where peer insights, shared experience and practical support help make a real difference in building a more resilient, forward-looking, and competitive SME sector”.
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