UK CEOs Show Economic Concern in Q1 2025, With Office Return on the Horizon, Says Vistage Confidence Index A new report from Vistage, the global leader in business performance and leadership for SMEs, reveals a significant decline in economic confidence among UK business leaders, according to its Q1 2025 CEO Confidence Index.
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The report highlights a noticeable downturn in business sentiment, with the confidence index falling from 91.4 in the previous quarter to 87.5 in Q1 2025. Over half (53%) of SME business leaders surveyed report that economic conditions have worsened over the past 12 months, and 41% predict further deterioration over the next year. These concerns follow the Chancellor's Spring Statement, which offered limited support to SMEs and introduced welfare cuts that could dampen consumer spending.
Return to Office Gains Momentum
In response to the evolving workplace landscape, many business leaders are embracing a return to the traditional office setting. The report shows that 34% of SME leaders plan to bring employees back to the office full-time, with 21% believing this shift will boost productivity and collaboration, while 34% see it as a way to strengthen company culture and team cohesion. Despite the economic challenges, there is optimism regarding workforce expansion. Around 31% of business leaders plan to increase their talent pool in 2025, reflecting cautious yet hopeful growth strategies for the year ahead.
AI Adoption on the Rise Among SMEs
As artificial intelligence continues to transform the business landscape, SMEs are stepping up their adoption efforts. The report reveals that 65% of business leaders and 70% of CEOs are actively engaging with AI to improve efficiency. To ensure effective and responsible AI integration, nearly half (46%) of leaders have introduced formal AI policies, and 50% are investing in employee training to ensure smooth implementation.
Revenue Growth Forecasted, But Profit Expectations Remain Cautious
Despite the challenging economic environment, many business leaders remain confident in their ability to grow revenues. Over half (56%) of business leaders anticipate an increase in their company's sales in the next 12 months. However, profit expectations are more restrained, with only 38% expecting higher profits, while another 38% predict profits will remain stable. Looking further ahead, 34% of SME leaders plan to increase investment in their businesses this year, though 44% expect their investment levels to remain steady.
As UK businesses navigate a period of uncertainty, the Q1 2025 Vistage CEO Confidence Index paints a picture of cautious optimism, with an emphasis on adapting to new economic realities, reinforcing team dynamics, and embracing technological advancements like AI to drive future growth.
