Vistage Index Reports an Increase in Gains for Small and Midsize Businesses

OCT 6, 2022 - 7:32 am

According to the latest CEO Confidence Index from Vistage, a CEO coaching and peer advisory organization, small and midsize business (SMB) CEO confidence saw a slight uptick in Q3, along with a slight increase in CEO revenue and profit expectations.

Vistage’s CEO Confidence Index, which has measured SMB leaders’ sentiment on a variety of economic and business factors on a quarterly basis since 2003, rose modestly to 73.4 in Q3 2022, up from 69 in Q2 2022. This is still down from 84.3 in Q1 2022 and 97.1 in Q3 2021. Meanwhile, 54% anticipate revenue increases (up from 52%) and 38% (up from 32%) expect profitability to improve in the year ahead.

“CEOs are accepting disruption as a part of their new reality and adjusting accordingly,” Joe Galvin, chief research officer at Vistage, said. “While pessimism about future economic conditions has abated among CEOs, concerns about rising inflation and interest rates are holding confidence at levels lower than last year.”

Survey highlights include:

12% of SMB CEOs believe the overall economic conditions in the U.S. will improve in the next year (up from 8% in Q2 2022, but below last year’s 31%). More significantly, the proportion who believe the economy will worsen dropped from 64% to 50%.
16% feel economic conditions have improved over the last year, well below the 56% recorded last year.
67% plan to increase prices for their products or services in the next year.
Profit expectations improve
38% of SMB CEOs anticipate higher profits in the year ahead (up from 32% in Q2 2022, but below last year’s 50%).
54% expect increased revenues in the year ahead (up from 52% in Q2 2022 and down from 68% in Q1 2022).
When asked what factors will contribute to the revenues in the coming year:
61% of CEOs report rising customer demand
61% report price increases
47% report market expansion
38% report new products or services
38% report increased productivity
Continued decreases in planned investments, as interest rates rise
35% of SMB CEOs plan to increase their investments in plants and equipment in the next 12 months (down from 38% last quarter and 45% two quarters ago).
When asked about which effects of inflation are impacting their business:
91% said increased wages and compensation
80% cited increased prices from vendors
63% reported higher costs for raw materials
56% experienced higher energy prices
Hiring remains a challenge for leaders
62% of SMB CEOs report hiring challenges are impacting their ability to operate at full capacity.
For those having trouble hiring:
82% have already boosted wages
73% have developed their existing workforce
65% have refined their recruitment strategies
64% have offered flexible hours/schedules
59% are allowing remote work options