Corporate leaders across the United States have shifted dramatically from optimism to a pessimistic outlook on the economy within a three-month period. This change is highlighted by the latest Conference Board Measure of CEO Confidence, conducted in collaboration with The Business Council, which surveyed 141 chief executives. The overall confidence score plummeted to 47 in the second quarter of 2026, a significant drop from 59 in the first quarter. A score below 50 indicates that negative outlooks now outweigh positive ones among CEOs.
The survey revealed a stark deterioration in sentiment regarding current economic conditions. Only 15% of CEOs reported that the economy was better than six months prior, a substantial decrease from 39% in the first quarter. Conversely, 47% of CEOs indicated that the economy had worsened, a significant increase from just 8% in the preceding quarter. Looking ahead, 40% of respondents anticipate economic conditions will further deteriorate over the next six months, a notable rise from the 13% who held this view last quarter.
Dana M. Peterson, Chief Economist at The Conference Board, commented on this trend, stating that "CEO confidence fell back into negative territory in Q2 2026, reversing the surge in optimism in the first quarter." Peterson further elaborated that "CEOs reported that the economy is materially worse now than it was six months ago and expected economic conditions to weaken further over the next six months." She also noted a decline in CEO assessments regarding both current conditions and future expectations for their own industries compared to the previous quarter.
This darkening corporate outlook coincides with recent economic data. The Bureau of Economic Analysis (BEA) released its final reading for fourth-quarter GDP less than a month ago, which showed the U.S. economy expanded at an annualized rate of 0.5% during the October, November, and December period. This growth figure was lower than the 0.7% GDP growth estimated by economists polled by LSEG.
The broader economic forecast also suggests increasing headwinds. EY-Parthenon chief economist Gregory Daco previously told FOX Business that "Despite a solid 2.1% expansion for the full year, 2025 will likely be remembered as the year that ‘could have been.’" Daco added that "The outlook for 2026 appears even less favorable. The Middle East conflict is set to exacerbate existing headwinds, with higher inflation, weaker real disposable income growth, and tighter financial conditions further weighing on economic momentum." Rochefort co-CEO Kyle Bass also analyzed the global economy as President Donald Trump signaled a turning point in the U.S.-Iran conflict, warning that Iran tensions could trigger global recession fears.
Shifting Business Strategies and Workforce Outlook
The prevailing business slowdown is directly influencing corporate planning, leading to signals of belt-tightening, reduced hiring intentions, and preparations for potential workforce reductions. A significant 31% of surveyed CEOs now expect to decrease their workforce over the next six months, surpassing the 28% who plan to expand hiring. Furthermore, planned wage increases are losing momentum, with the majority concentrating in the 3% to 4% range. Hiring challenges persist, as 53% of CEOs reported experiencing "some problems in some areas" when attempting to fill positions.
Roger W. Ferguson, Jr., Vice Chairman of The Business Council and Chair Emeritus of The Conference Board, characterized the current environment, stating, "The ‘low-hire, low-fire’ economy remains in place." He observed that "The share of CEOs planning to increase the size of their workforce over the next 12 months edged down, while those expecting job cuts rose slightly." This indicates a cautious approach to employment, with companies prioritizing stability over aggressive expansion.
Beyond economic indicators and labor market dynamics, CEOs are also expressing heightened concerns about various business risks impacting their industries. Cyber risks emerged as a top concern, with nearly two-thirds of CEOs ranking it as a primary threat in the second quarter. Geopolitical risks and those associated with artificial intelligence (AI) and new technologies also remained significant concerns for corporate leaders. Additionally, risks associated with supply chains and energy rose in importance and intensity during the second quarter, reflecting ongoing global uncertainties.
This collective sentiment from top executives underscores a cautious and increasingly pessimistic view of the economic landscape for the remainder of 2026, marked by expectations of weakening conditions, constrained hiring, and a focus on managing a complex array of business risks.
