CEO Confidence Hits 3-Year High Amid Optimism on Labor Market, Economy

The Conference Board Measure of CEO Confidence™ in collaboration with The Business Council surged to 60 in Q1 2025, the highest level in three years. This significant increase, from 52 in Q3 2024, reflects a broad-based improvement in CEOs' assessments of current economic conditions, future economic conditions, and expectations for their own industries. The survey, fielded from January 27 to February 10, 2025, gathered insights from 134 CEOs.



CEOs' assessments of current economic conditions turned positive in Q1 2025, with 44% saying economic conditions were better than six months ago, up from just 20% in Q4 2024. Only 11% said conditions were worse, down significantly from 30% in the previous quarter. This optimism was echoed in CEOs' expectations for future economic conditions, with 56% expecting economic conditions to improve over the next six months, up from 33% in Q4 2024. Only 15% expected conditions to worsen, down from 23%.



CEOs' expectations for their own industries also improved in Q1 2025. 52% expected conditions in their own industry to improve over the next six months, up from 31% in Q4 2024. Only 14% expected conditions to worsen, down from 22%. This positive outlook is reflected in CEOs' plans for capital spending, with 33% expecting to increase investment plans, up from 25% in Q4 2024.



The improvement in CEO confidence is broad-based, with all components of the measure improving, including assessments of current economic conditions, future economic conditions, and expectations for their own industries. This optimism is influenced by the labor market's improvement, as indicated by the shift from cautious optimism in 2024 to confident optimism in 2025. Key trends in hiring and wage growth, as reported by CEOs, include:

1. Employment: In Q1 2025, 41% of CEOs planned to maintain their workforce, while 32% expected to expand it. However, the share planning to reduce their workforce ticked up to 27%. This indicates a generally positive outlook on employment, with a majority of CEOs planning to grow or maintain their workforce.
2. Hiring Qualified People: Labor shortages continued to ease in Q1 2025, with more CEOs reporting no or little problems hiring. This is reflected in the increase in the share of CEOs expecting no problem hiring, which rose to 10% from 6% in Q4 2024.
3. Wages: A majority of CEOs (60%) planned to increase salaries by 3.0–3.9% over the next 12 months in Q1 2025, up from 48% in Q4 2024. This indicates a positive outlook on wage growth, with most CEOs planning wage increases in the 3.0–3.9% range.



Geopolitical risks have played a significant role in shaping CEOs' confidence levels, as indicated by their responses in The Conference Board's CEO Confidence Survey. In the first quarter of 2025, 55% of CEOs ranked geopolitical instability as a high-impact risk to their industry, up from 52% in the previous quarter (Q4 2024). This increase in perceived risk comes amidst a broader improvement in CEOs' confidence levels, with the Measure of CEO Confidence™ rising to 60, the highest level in three years. The evolution of CEOs' perceptions of geopolitical risks can be traced back to the survey's historical data, with 48% of CEOs ranking geopolitical instability as a high-impact risk in Q1 2024, increasing to 52% in Q4 2024 and further to 55% in Q1 2025. This upward trend suggests that CEOs have become more concerned about geopolitical risks over time, despite the overall improvement in their confidence levels.

In summary, CEO confidence surged to a 3-year high in Q1 2025, driven by optimism about current economic conditions, future economic conditions, and expectations for their own industries. This improvement is influenced by the labor market's improvement, with CEOs reporting easing labor shortages and positive expectations for hiring and wage growth. Geopolitical risks remain a concern for CEOs, with 55% ranking geopolitical instability as a high-impact risk to their industry in Q1 2025. Despite these risks, CEOs remain confident about the future, reflecting a shift from cautious optimism in 2024 to confident optimism in 2025.