America’s CEOs entered August with a brighter view of the business environment, extending the steady recovery in confidence seen over the past several months. 

Chief Executive’s August CEO Confidence Index, fielded August 4 and 5 among 285 U.S. CEOs, finds leaders increasingly confident in today’s business environment. Their rating of current conditions rose 3 percent from July, from 5.8 to 6 out of 10.  

That moves the Index into “good” territory for the first time since December 2025 and above where CEOs expected conditions to be by now. In August 2025, CEOs forecasted business conditions would reach approximately 5.7 by August 2026. Their current rating of 6/10 is 5 percent higher than that year-ago projection. 

That improvement carries into the year-ahead outlook. CEOs expect business conditions to reach 6.1/10 by this time next year, 2 percent above current levels and 3 percent higher than their July forecast. It is the strongest year-ahead reading since December, when CEOs projected conditions would reach 6.4/10. 

‘Solid Demand’ 

Asked to explain what is shaping their expectations for the year ahead, CEOs polled once again most frequently pointed to demand, sales or backlog. Forty-four percent cited those factors as reasons for their 12-month outlook.  

“Demand continues to be positive,” said Transworld Business Advisors Detroit South CEO Shathi Govender, though he adds “labor remains challenging” to execute on this demand. 

“Demand is surprisingly resilient to price increases,” said the CEO of a large international transportation company who requested to remain anonymous. 

Others expect demand to strengthen even further. “When this Iran war ends, I think demand will go up quite a bit,” said David Chavez, CEO of business coaching firm Assured Strategy. 

Still, roughly a third of CEOs cited costs, inflation or margin pressure as factors weighing on their outlook. Another 30 percent mentioned geopolitics, while 19 percent pointed to government policy or regulation. 

Labor was not among the leading drivers of CEOs’ 12-month forecasts, cited by 11 percent of respondents, but it surfaced repeatedly in comments about the current environment. CEOs pointed to tight labor markets, wage pressure, employee retention, skill gaps and the need to invest in training and leadership development. 

The share of CEOs expecting improvement, deterioration or little change in conditions was stable in August. What changed was the strength of their ratings, which moved higher overall. 

Growth Ahead 

CEOs are also more optimistic about the near-term U.S. economy. Sixty-four percent forecast economic growth over the next six months, while 11 percent expect a slowdown—the lowest share since Chief Executive began tracking the measure in April 2025. The remaining 25 percent expect the economy to remain flat. 

“The market has remained stronger than expected for longer than expected,” said the CEO of a national wholesaler. 

Rising costs and margin pressure remain a major concern, selected by 44 percent of CEOs as one of the biggest challenges to achieving their goals this year. But respondents do not expect inflation to accelerate further: Their average 12-month headline CPI forecast held at 3.6 percent. 

The forecast has remained relatively stable for the past five months but remains 0.3 percentage points above the 3.3 percent average recorded at the start of the year. The increase followed the start of the war in Iran, when CEOs raised their inflation expectations. 

“Inflationary factors leading to rapid and sustained price increases are squeezing our margins severely and pricing some of our products out of the market,” said Tim Zimmerman, CEO of Mitchell Metal Products. 

Some CEOs expect inflationary pressure to ease as geopolitical disruption subsides. George Sheth, managing partner at Diligent Partners, expects “the Iran war to be over, affordability for the general consumer to improve, inflation to be more in control and pent-up demand to come to fruition in a number of sectors.” 

A Matter of Execution 

Despite rising optimism, several CEOs acknowledged the challenges business leaders continue to face. One travel-and-leisure CEO pointed to declining consumer confidence, political turmoil, election uncertainty and drought conditions. With some consumers cutting discretionary travel, the CEO called the trend “a canary in the coal mine.” 

Still, many CEOs expect their companies to end 2026 in better shape than they began it—even when they hold a negative view of the broader environment. The survey finds only a weak relationship between CEOs’ views of overall business conditions and their forecasts for their own companies. 

Even among CEOs who expect business conditions to worsen over the next year, 83 percent forecast revenue growth and 71 percent expect profits to increase.  

Pessimistic CEOs were also the most likely of the three groups to forecast revenue growth: 83 percent, compared with 79 percent of neutral CEOs and 66 percent of optimists. The pattern suggests that many leaders separate their view of the broader environment from their expectations for their own companies. 

Profit-growth expectations were more consistent, ranging from 65 percent among optimists to 72 percent among neutral CEOs and 71 percent among pessimists. 

One finding may help explain that confidence: 53 percent say strong execution and organizational alignment is the biggest driver of achieving their company’s goals this year. 

Among CEOs polled in August, 75 percent expect 2026 revenue to exceed 2025 levels, up from 73 percent in July and roughly in line with the start of the year. Sixty-nine percent forecast higher profits, up from 65 percent in July and 67 percent in January. 

Capital spending showed the largest month-over-month rebound. Fifty-one percent plan to increase CapEx, up 12 percentage points from 39 percent in July and 6 points from 45 percent in January. 

At the same time, 73 percent expect operating expenses to rise. 

Hiring remains the laggard: 47 percent expect to increase headcount, up from 43 percent in July but below the 53 percent who planned to add employees at the start of the year. 

For many, that puts the emphasis back on execution. “Like many business leaders, I am navigating the uncertainty,” said one CEO respondent, “and my focus remains on supporting our people, strengthening customer relationships and preparing the business to take advantage of opportunities when the market improves.”