Uncertainty Rises, Small Business CEO Confidence Stalls [WSJ/Vistage Aug 2025]

After July’s modest boost in confidence, the WSJ/Vistage Small Business CEO Confidence Index dropped slightly in August to 85.0. Beneath this relative stability, however, lies a growing undercurrent of uncertainty, driven by shifting policy signals and unanswered questions about the recently passed One Big Beautiful Bill Act (OBBBA).

Nearly half of small business leaders report that their economic uncertainty has grown in the last few months. Simply scanning headlines of tariffs, trade, and other legislation reveals plenty of unknowns. Even the OBBBA, with its major tax provisions, has been slow to gain positive traction.

Tariff Impacts

While confidence dipped only slightly in August, uncertainty remains high as businesses prepare for potential changes and the implementation of new tariff policies. Some leaders are absorbing higher costs, while others are passing them on to customers. “A few of our vendors have raised their prices on certain items due to tariffs. We have just passed along the cost to our customers,” says Guillermo Arrieta, President of GA Flooring in Highland Park, New Jersey.

Bob Pilon, CEO of Dynamic Tub, Inc. in Maquoketa, Iowa, notes that they have implemented a “120% pass-through of all international tariff charges,” a stark example of how quickly cost pressures can escalate.

Other small business leaders report that projects are stalling. Delayed capital investments and client hesitancy to move forward underscore the domino effect of policy uncertainty within specific industries.

Even for those not making immediate changes, the possibility of shifting tariff policy continues to shape decisions, prompting some leaders to proactively adjust pricing, delay spending, or prepare contingency plans for supply chain disruptions.

Enthusiasm Surrounding OBBBA Starts Slow

Despite business-friendly tax policies, the OBBBA has yet to spark widespread enthusiasm. Just over a third of small business leaders view the bill positively, while 28% remain neutral and nearly a quarter (24%) express a negative outlook.

While the legislation contains provisions that could benefit businesses, particularly around tax stability and incentives, more than half (53%) of small business leaders report they are not planning any changes in response at this time. Among those who are, the primary focus is on workforce investments:

• 24% plan to hire additional workers.
• 23% plan to increase wages.
• 3% are currently planning to add benefits, including childcare, medical leave, or employee student loan relief.

Supporters of the legislation highlight its promise of stability and growth. Business-friendly policies will encourage investment in the business. Scott Erickson of Erickson Outdoor Lighting in Mound, Minnesota, says the bill will help “keep business taxes low so we have the confidence to hire and grow … businesses will thrive in the next few years.” Other leaders stressed that permanent tax rates create stability, and that reinstating accelerated cost recovery gives companies a stronger incentive to invest in capital.

Dale Lemmons, President and CEO of Interstate Wood Products in Kelso, Washington, underscored this point, calling out that a key advantage of the OBBBA is “tax certainty going forward and permanent tax relief.”

For many leaders, however, the risks outweigh the potential rewards. Their chief concern centers on deficit spending and its long-term economic impact. Tom Ratliff, President and CEO of Canopy Corporation in Birmingham, Alabama, cautions that “Continued deficit spending is pushing the country toward unsustainable debt levels. This trajectory risks weakening the economy, which could directly impact our business.”

Joe Beranek, President/Owner of Evergreen Tool, Inc. in Peshtigo, Wisconsin, echoed this sentiment, warning that “the greatest challenge is the increased deficit having a negative impact on the strength of the dollar.” John Kookootsedes, CEO of IAG Insurance Services in Ladera Ranch, California, pointed to broader social implications, saying, “making tax rates more permanent gives certainty, the restoration of accelerated cost recovery also helps with capital investments.”

Economic Uncertainty Adds to the Caution

While economic confidence remained somewhat stable in August, leaders continue to navigate an environment shaped by shifting policies, uneven demand, and funding changes. Uncertainty is more than just a buzzword or headline; it is a reality small businesses face. Nearly half of small business leaders (47%) report that their uncertainty has grown in recent months, a concern reflected in the 44% who say current economic conditions are worse than a year ago and the 35% who anticipate further decline the year ahead.

Some describe the current environment as a pause before potential disruption. “A few months ago, the business environment outlook was dire — tariffs and war. Now tariffs are real, Fed rates have remained unchanged, the job market looks horrible, war seems imminent, and yet several other indicators seem to look pretty good,” says Ryan Surber, CEO of Sector Technology Group, Urbandale, Iowa. All things considered, it just seems we are in the ‘calm’ before the storm.” 

Others are already feeling the slowdown. Joe Sziabowski, President/CEO of Hardaway|Sziabowski Architects in Wellesley Hills, Massachusetts, notes, “Clients are holding back on project starts; projects are starting and stopping unexpectedly; there is a lack of continuity and delayed schedules.”

There are still pockets of optimism found in industries not impacted by tariffs. “Better bid opportunities, better employee morale concerning economy, and lower variable expenses & fuel costs,” says Brock Bruce, Founder, President and CEO of PROSHRED in Houston, Texas. This mix of perspectives reflects the reality for many small businesses; while some are capitalizing on improved conditions, others are bracing for the next wave of challenges.

Workforce Trends

While the Bureau of Labor Statistics was making headlines at the time of the survey, it’s important to note that there are many stories to be revealed from any dataset; Taylor St. Germain from ITR Economics reminds us that the labor trends reported in July are not as dire as headlines might indicate.

Since the start of 2025, 47% of small businesses have maintained headcount, 31% have expanded, and 22% have reduced staff. Looking ahead, 43% expect no change to their workforce during the next year, 44% anticipate adding workers, and 12% foresee workforce reductions, often by not replacing roles lost through attrition or retirement.

Some leaders are seeing enough demand to drive expansion. “Clients are more ready to hire than they were last year,” says Shannon Russo, CEO of Kinetix in Atlanta, Georgia.

Meanwhile, others are taking a more cautious approach. “Not replacing people who quit to be as conservative as possible during this time of uncertainty,” explains Jen Augustyn, CEO of The Dealey Group in Dallas, Texas.

The same goes for Kendra Prospero, CEO and Founder of Turning the Corner HR in Denver, Colorado. “Uncertainty has forced me to not back-fill roles.”

Implications for Leaders

Policy shifts, ongoing uncertainty surrounding the OBBBA, and mixed workforce trends indicate that business leaders should adopt a proactive approach to planning. Key actions to consider:

• Hiring strategy: Regularly review staffing plans to align with demand and economic signals. Prioritize critical roles while deferring backfills where uncertainty is high.
• Wages and benefits: Balance competitive pay and benefits against inflationary pressures and profitability goals, using targeted adjustments rather than across-the-board increases.
• Capital investment timing: Take advantage of tax incentives, but stage investments to preserve flexibility if market conditions shift.
• Policy watch: Closely monitor developments in tariffs, trade, and immigration that could affect costs, labor availability, and supply chains.
• Contingency planning: Maintain plans that address both immediate disruptions and longer-term structural changes.

August Highlights

The August WSJ/Vistage Small Business CEO Confidence Index was calculated from an online survey sent to CEOs and other key leaders who are active U.S. Vistage members. The survey, conducted between August 4 and 11, 2025, collected data from 450 respondents with annual revenues ranging from $1 million to $20 million.

• Current economy: Slightly under one quarter (24%) of small businesses believe the U.S. economy is better than a year ago, while 44% believe the state of the economy has worsened.
• Future economy: Small business leaders remain divided on the future of the U.S. economy; 32% expect improvement over the next 12 months, 29% foresee conditions holding steady, and 35% anticipate a decline.
• Revenue projections: 57% of small businesses expect increased revenues over the year ahead, comparable to expectations in the last 2 months. Just 16% expect decreased revenues, down 9 points from 27% in April.
• Profitability projections: Profitability expectations have held steady in recent months. In August, 43% of small business leaders anticipated increased profits, while 25% projected a decline, closely mirroring sentiment levels in June and July.
• Fixed investment plans: While 35% of small business leaders expect to increase fixed investments in the next 12 months, 16% plan to decrease.
• Workforce expansion plans: Just over 4 in 10 small business leaders (44%) plan to increase their workforce over the next 12 months, and 12% anticipate a reduction.

To explore the full August 2025 WSJ/Vistage Small Business data set, visit our data center or download the infographic.

The September 2025 WSJ/Vistage Small Business CEO Confidence Index will be calculated from small business respondents to the quarterly Vistage CEO Confidence Index survey, which will take place September 2-16, 2025.

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