The most recent Vistage CEO Confidence Survey shows that leaders of SME businesses in the UK and Ireland are becoming more cautious about the economy as a whole, but they are still very confident in their own businesses.
More than half of leaders believe the economy has gotten worse, and many believe it will get worse in the next year. People outside the business are not as confident as people inside the business, but people inside the business are becoming more optimistic about making money and being strong.
The economic outlook is still bad
More than half of the people who answered (54%) say that the economy in the UK and Ireland has gotten worse in the past year. Only 6% say it has gotten better. 39% of people think the economy will get worse over the next year, while only 12% think it will get better, and 45% think things will stay mostly the same. The results point to a cautious outlook, with leaders putting less emphasis on a quick economic recovery and more on what they can do to improve their own businesses.
SME leaders help their own businesses grow
On the other hand, leaders of small and medium-sized businesses are much more positive about their own companies. About two-thirds (63%) of people think their company’s sales will go up over the next year, while only 6% think they will go down. Half (50%) think that profits will get better, about a third (32%) think that profits will stay the same, and a smaller group (18%) thinks that profits will get worse.
Investment plans back up this confidence. Almost 39% of leaders plan to increase fixed investment, 38% plan to keep it the same, and only 21% plan to cut back. Instead of waiting for things to get better, small and medium-sized businesses seem to be using this time to strengthen their position and get ready for future growth.
Rising costs and customer demand are at the top of the list of pressures.
When asked what the biggest problem their business is facing is, 29% of leaders said rising costs, and 25% said customer demand. Regulatory change (9%), competition (8%), keeping good employees (7%), problems with the supply chain (5%), and getting money (3%) are some of the other problems.
The fact that costs are going up and demand is uncertain shows that SME businesses are being squeezed from both sides. They are facing higher costs for inputs on one side and questions about future sales on the other.
Investing for 2026: Growth, Technology, and Talent
Leaders are planning for growth instead of cuts as they look ahead to 2026. The results show that most business leaders are focused on developing new products or services (41%), adopting new technologies (38%), and making changes to their leadership (35%). They are also focused on cutting costs (27%), forming strategic partnerships (28%), prioritising investments (23%), and hiring (20%).
As part of these plans, leaders’ top investment priorities for 2026 are AI (45%), market expansion (44%), technology and training and development (both 41%), people and recruitment and customer experience (both 38%), and product development (27%). Infrastructure (18%) and sustainability (6%) are also on the list. This focus on technology, skills, people, and customers shows that small and medium-sized businesses are getting ready to be stronger and more competitive, not just wait for things to get better.
AI is going mainstream
The survey shows that many businesses now use Generative AI in a big way. More than seven out of ten leaders (72%) say that members of the leadership team are using Generative AI. Sixty-five percent say the CEO is using it, and sixty-five percent say that specific teams or functions are using it. Almost half (46%) of people say that employees are also using AI tools on their own, and only a small number (7%) say that AI is not being used at all.
Leaders think this will really change how work is done. Almost half (49%) think that AI will change people’s jobs, and 14% think that it will create new jobs. In contrast, 15% think AI will cut jobs, 1% think it will add jobs, 21% think it won’t have any effect, and 13% don’t know. This suggests that most s SMEs see AI less as a blunt tool for cutting costs and more as a way to change how work is done and improve the company’s overall capabilities.
Rebecca Drew, Managing Director of Vistage UK and Ireland, said, “Our most recent survey results show that CEOs are fully aware of the state of the economy.” A lot of people think things are getting worse and won’t get better in the next year. Still, they keep supporting their own businesses by putting money into making them more profitable, growing their revenue, and getting ready for the future.
The quality of leadership decisions is more important than ever because costs are going up and customer demand is high. When things get tough like this, having trusted peers to pressure-test their plans, compare approaches, and learn from others’ experiences can make the difference between staying still and moving forward with confidence.
The quarterly CEO Confidence Index is one of the ways that Vistage helps business leaders. It gives them a clear picture of how people feel about the economy, which helps them make better decisions in today’s complicated world.
