San Diego – October 19, 2026 -- The Vistage CEO Confidence Index fell 3.4 points to 80.8 in Q3 2026 from 84.2 in the prior quarter, marking the third consecutive quarterly decline in small and midsize business (SMB) CEO sentiment.
Expectations for the year ahead dropped the most. Only 19% of CEOs expect the U.S. economy to improve over the next year, down 10 percentage points from last quarter and 13 points below Q3 2025. A further 34% expect conditions to worsen, up 8 points.
Revenue hopes hold at 62%, but profit expectations lag at 47%
Some 62% of CEOs expect higher revenue, down 2 points from last quarter. Only 47% expect higher profit, as rising costs erode margins. Of those surveyed, 36% plan to increase fixed investments over the next year, down from 38% in Q2. Another 46% say U.S. economic conditions have worsened versus last year, while 14% say they have improved, down 5 points.
"Growing inflation, higher interest rates, and the soaring price of energy" are feeding a cycle of higher costs and compressed margins, said Joe Galvin, Vistage's chief research officer.
Health care costs set to rise at least 6% for 74% of CEOs
Among respondents, 33% expect health care cost increases above 10% next year. Some 71% plan to seek competitive bids on their health benefits plan, and 24% plan to change providers or plans. Only 23% prefer to keep their current plan without shopping around.
CEOs are weighing self-insurance, captive insurance, level-funded plans, PEOs and ICHRAs. They must balance savings against the recruiting and retention risks of cutting benefits or shifting costs to employees.
CEOs cut debt and build cash reserves as interest rates stay elevated
Open-ended responses show CEOs are reducing debt and avoiding new borrowing, building cash reserves, and funding growth through operating cash flow. Others are applying tighter criteria to capital investments and acquisitions, or refinancing and locking in fixed rates.
Eric Post, Deputy Chief Economist at ITR Economics, said rising input costs for materials, labor, electricity and insurance make margin compression and profitability struggles likely heading into 2027. He urged businesses not to over-plan for top-line growth as the economy slows.
ITR Economics' rate-of-change methodology has confirmed the Index as a leading indicator of the U.S. Industrial Production Index nine months in advance.
Hiring steady at 50% while generative AI use among CEOs reaches 82%
Half of CEOs plan to expand their workforce, unchanged from last quarter, while 11% expect a decrease. Personal generative AI use among CEOs rose to 82% from 76% in Q4 2025. Only 3% say no one in their organization uses it. More than 70% of CEOs whose businesses support data centers or AI infrastructure expect that segment to grow in the next 12 months.
Customers delay and cancel orders as pipelines shrink
Top challenges include finding and retaining qualified talent and rising costs for labor, fuel, insurance, materials, freight and tariffs. CEOs also describe customers who delay, postpone or cancel orders, and sales pipelines that are smaller and less reliable.
The survey was sent to 9,443 active Vistage members and open from September 8 to 22, 2026. It captured responses from 1,146 leaders.