Vistage CEOs’ optimism for U.S. economy tumbles

Business leaders in Wisconsin have bigger decline in confidence

Economic confidence among CEOs from small and midsize businesses has fallen to the lowest level in three years, according to the latest survey results from Vistage.

The Q2 2019 CEO Confidence Index survey, conducted June 3-10, drew responses from 1,463 CEOs of small and midsize businesses across the United States. In Wisconsin, CEO confidence has fallen at a greater pace than the national average.

The survey asked CEOs about:

  • Their sentiment on the current and future state of the national economy
  • Expectations for revenue and profitability
  • Expansion plans that include hiring and investments

Of those, the biggest factor was a more pessimistic view that CEOs nationwide have of current and future conditions in the U.S. economy. Let’s look at how CEOs in Wisconsin compare to those national averages, as well as the change from last quarter’s survey results.

Wisconsin CEOs see dark clouds getting darker

While less than one-third (31%) of all CEOs nationally reported that economic conditions had recently improved, only 19% of Wisconsin CEOs agreed. That’s the most significant difference. Only 13% of CEOs nationally said they think the economy will improve in the next 12 months, a figure that was mirrored by CEOs in Wisconsin.

The number of CEOs that expect gloomy days ahead is growing. Thirty-five percent of CEOs nationally reported that they expect the economy to worsen in the year ahead, while in Wisconsin 39% of CEOs said they expect declines.

Lower revenue and profits too

The proportion of Wisconsin CEOs that expect increased revenues in the year ahead dropped 14 percentage points, from 70% in Q1 to 56% in Q2. That’s more than twice the rate of decline from the national revenue growth expectations, which fell from 70% to 64%.

Less than half (48%) of Wisconsin CEOs expect more profits in the year ahead compared to 54% nationally. That figure also dropped significantly – by 15 percentage points – from last quarter when 63% of Wisconsin CEOs expected greater revenues.


Possibly because of a greater impact of higher tariffs in Wisconsin. Nearly half (48%) of CEOs in Wisconsin report being hurt by tariffs, compared to 40% nationally. But the good news is that 10% of CEOs of small- and medium-size businesses in Wisconsin, compared to only 4 % nationally, say tariffs are helping their companies.

One example of positive impacts of tariffs is when a business has a supply chain from countries not subject to tariffs. When their competitors raise prices due to increased costs, it puts the business in a unique position to either be more price competitive or to also raise prices without the burden of the increased cost.

Expansion plans safer than expected

Despite less confidence in the economy and slowing expectations for growth in revenue and profitability, expansion plans in Wisconsin appear safer than you would expect.

Nearly half (48%) of CEOs of small and midsize companies here said they plan to increase investments. That’s compared to last quarter’s 44%, and above the national data, which shows that just 40% plan to increase investments.

On the other end of the spectrum, 21% of Wisconsin CEOs say they plan to decrease investments, 8 percentage points above the national average.

Declining revenues and profitability are having the biggest effect on plans to hire fewer employees. The pace of workforce expansion in Wisconsin has dropped 10 percentage points, from 55% to 45%. That’s 11 points lower than the latest national figure of 56%. In this case, the shift seems to be to the other end of the spectrum, toward downsizing. Thirteen percent of CEOs in Wisconsin report plans to decrease their workforce in the year ahead, nearly twice the national average of 7%.

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