CEO confidence improved modestly for the fourth consecutive month in June, with business leaders reporting a better view of current conditions but a nearly unchanged outlook for the year ahead. 

The latest reading of Chief Executive’s CEO Confidence Index points to a mixed environment. Many CEOs report stable demand, solid backlogs and pockets of growth, while others cite flattening sales, margin pressure and uncertainty around customer decision-making. 

CEOs’ rating of current business conditions rose roughly 2 percent, to 5.7 out of 10, from 5.6 in May. Mid-way through the year, the Index has shown improvements over 2025, which turned out to be the worst year since 2012. But confidence remains low relative to prior years. Without further improvements, 2026 could close as the second-worst year of the past decade. 

Nearly half (47 percent) of CEOs polled expect conditions will improve in the months ahead, though our forward-looking indicator remains relatively unchanged since May. CEOs expect business conditions will register at 6.1 by this time next year, vs. 6.0 in May—an improvement of 7 percent from where they are today. 

Among the 315 CEOs participating in the June 2-3 survey, the most cited factor behind their perspectives was geopolitics, mentioned by 42 percent. Demand, sales or backlog followed closely, cited by 40 percent. 

Those same themes were cited by CEOs on both sides of the outlook. For some, the expectation is that delayed demand will return once there is greater clarity around the war, tariffs, interest rates and policy. For others, the concern is that those same forces will continue to weigh on costs, pricing and consumer activity through the rest of the year. 

Steven A. Schneider, CEO and executive chair of executive search and management consulting firm SHS Group Holdings, says he’s optimistic that one year from now, “things should be more stabilized, and business will have a clear picture going forward.” 

Other CEOs with optimistic views of the coming year cited new products, onshoring, steady backlogs and pent-up demand as factors supporting their outlook.  

“Orders are up over 12 months ago. And the industries we serve are predicting growth over the next 24 months,” said Jason Stanczyk, president and CEO of EDCO, a Maryland-based, family-owned manufacturer that credits its success in part to keeping operations in the U.S. 

Meanwhile, the CEOs who expect conditions to deteriorate are looking at the same landscape but seeing it through a very different lens. Several tied the war, tariffs and policy volatility directly to higher fuel, materials, labor and overall operating costs. 

“Prices for materials are up, demand is flattening, current policy is driving costs up,” said the CEO of a family-owned manufacturing business in the Midwest. 

“Uncertainty over Iran, continued inflationary pressures on fuel, tariffs and overall cost of living,” were the reasons behind the pessimistic views of the CEO of a PE-backed wholesale distribution company with global operations. 

Then, there are some in the middle, CEOs who expect a fairly flat year ahead. A greater proportion (28 percent) now have a status quo outlook than a negative one (25 percent). 

“[It’s] not necessarily great geopolitically, but the world seems to be adjusting to it,” said global research firm Sago CEO Steve Schlesinger, who expects business conditions to remain a 7 out of 10 well into 2027 and anticipates the U.S. economy to be flat by the end of the year. 

For Peter Ensch, CEO of Sani-Matic, a manufacturer of cleaning systems and solutions for the food and beverage industry, it’s a matter of filtering out the noise. “Business leaders have grown accustomed to the constant chaos of the current administration,” he said. That ability, combined with pent up demand, is helping offset headwinds such as rising food prices. 

Economic Forecasts 

An increasing number of CEOs now expect the U.S. economy to continue growing through the end of the year.  

Fifty-seven percent of those polled in June forecast economic growth by the end of 2026, up from 53 percent in May. That is the highest share since February, when 65 percent expected growth, before the war in Iran brought the numbers down. 

At the same time, fewer CEOs are forecasting a recession. Fifteen percent now expect a recession within the next six months, down from May and the lowest level since February, when 12 percent forecast a downturn. 

Inflation expectations, however, remain elevated from earlier in the year. 

CEOs now forecast headline CPI inflation at 3.5 percent over the next 12 months, unchanged from May but up from 3.0 percent in February and March. The median forecast rose to 3.28 percent in April before reaching 3.5 percent in May and holding at that level in June. 

Corporate Forecasts 

At the company level, CEO forecasts point to continued confidence in demand, revenue growth and productivity gains over the next 12 months, even as expectations for hiring softened. 

• 71 percent expect revenues to grow in the year ahead, vs. 68 percent in May. 

• 61 percent anticipate increased profits, unchanged since May. 

• 44 percent of CEOs saying they expect to increase capex over the next 12 months, compared with 41 percent in May. 

• 41 percent of CEOs said they plan to add to their headcount over the next 12 months, down from 46 percent in May. 

Operating expenses remain elevated, though there are signs of easing. Seventy-three percent of CEOs expect operating expenses to increase over the next 12 months, down from April’s high of 77 percent.