Today Vistage, the leading business performance and leadership organisation for small and medium-sized businesses across the UK and Ireland, has released results from its quarterly CEO Confidence Index for 2025.
The quarterly confidence index, which is based on responses from business leaders, has declined to 88, down from 89.5 in Q2 2025 and 107.1 in Q2 2024.
The results also indicate that SMEs are in an era of cautious optimism amidst economic uncertainties.
While more than half of all those surveyed anticipate increased revenue (57%), 22% foresee a decline in profitability in the next 12 months. Only 10% expect to see any improvement within the economy over the next 12 months, highlighting a prevailing sense of caution and concern about the future economic conditions.ย
According to the report, the vast majority of business leaders (76%) are either not very confident or not confident at all that the upcoming Autumn Budget will deliver policies that support business growth.
When asked which measures would most improve SME confidence in the economy, more than half of respondents (58%) highlighted cuts to business taxes, such as Corporation Tax or Employer National Insurance, as their top priority. Additional measures identified included:
- Investment in infrastructure (20%)
- Reducing regulatory burden (10%)
- Targeted investment incentives (9%)
- Support in the labour market (4%)
As economic pressures mount, 42% of SMEs expect to raise prices in the coming months, while 19% have already increased prices by 7-10% since the start of the year.
These price increases come at a challenging time as customer demand softens, with one in four small business leaders reporting a noticeable drop. The combination of rising costs and weakening demand underscores the difficult balancing act SMEs face: maintaining profit while keeping customers engaged.
More than a third (37%) of small business leaders plan to expand their workforce over the next 12 months, demonstrating a clear intent to invest in growth even as economic challenges persist. Most SMEs are embracing flexible working arrangements, with nearly two-thirds operating a hybrid model that blends remote and onsite work, while just under a third remain fully onsite.
Employee engagement remains a top priority. Leaders are actively tracking the teamโs well-being through regular one-on-one meetings and engagement surveys, while focusing on building a positive workplace culture, recognising achievements, and providing career development opportunities. This emphasis on people suggests that SME are not only preparing for growth, but are also investing in the resilience and satisfaction of the teams.
Rebecca Drew, Managing Director, Vistage UK and Ireland said: Our latest index reflects a complex picture facing SMEs in the UK and Ireland. While leaders are grappling with rising costs, weaker customer demand, and uncertainty around government policy, many are still focused on growth – planning to expand their team and invest in employee engagement. The results show that SMEs are navigating a challenging economic environment and making decisions to safeguard both their people and their bottom line.
As such, the leaders most adept at navigating uncertainty are actively turning to their peers for perspective and guidance, helping them make informed decisions and position their businesses for long-term success.โ
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