America’s CEOs entered August with a brighter view of the business environment, extending the steady recovery in confidence seen over the past several months.
Chief Executive’s August CEO Confidence Index, fielded August 4 and 5 among285 U.S. CEOs,findsleaders increasingly confident in today’s business environment.Their rating of current conditions rose 3 percent from July, from 5.8 to 6 out of 10.
That moves the Index into “good” territory for the first time since December 2025andabovewhere CEOs expected conditions to be by now.In August 2025, CEOs forecastedbusiness conditions would reach approximately 5.7 by August 2026. Their current rating of 6/10is 5 percent higher than that year-ago projection.
That improvement carries into the year-ahead outlook. CEOs expect business conditions to reach 6.1/10by this time next year, 2 percent above current levels and 3 percent higher than their July forecast. It is the strongest year-ahead reading since December, when CEOs projected conditions would reach 6.4/10.
‘SolidDemand’
Asked to explain what is shaping their expectationsfor the year ahead, CEOspolledonce againmostfrequentlypointed to demand, sales or backlog. Forty-four percent cited those factorsas reasons for their 12-monthoutlook.
“Demand continues to be positive,” saidTransworld Business Advisors Detroit SouthCEOShathi Govender, though he adds “labor remains challenging”to execute on this demand.
“Demand is surprisingly resilient to price increases,” said the CEO of a largeinternationaltransportation company who requested to remain anonymous.
Others expect demand to strengthenevenfurther.“When this Iran war ends, Ithink demand will go up quite a bit,” saidDavid Chavez, CEOof business coaching firm Assured Strategy.
Still,roughlyathird of CEOs cited costs, inflation or margin pressure as factorsweighing ontheir outlook. Another 30 percent mentioned geopolitics, while 19 percent pointed to government policy or regulation.
Labor was not among the leading drivers of CEOs’ 12-month forecasts, cited by 11 percent of respondents, but it surfaced repeatedly in comments about the current environment. CEOs pointed to tight labor markets, wage pressure, employee retention, skillgapsand the need to invest in training and leadership development.
Theshareof CEOs expecting improvement,deteriorationorlittle changeinconditionswasstable in August. What changed was the strength of their ratings, which moved higher overall.
Growth Ahead
CEOs are also more optimistic about the near-term U.S. economy.Sixty-four percent forecast economic growth over the next six months, while 11 percent expect a slowdown—the lowest share sinceChief Executivebegan tracking the measure in April 2025.The remaining 25 percent expect the economy to remainflat.
“The market has remained stronger than expected for longer than expected,” said the CEO of a national wholesaler.
Rising costs and margin pressure remain a major concern, selected by 44 percent of CEOs as one of the biggest challenges to achieving their goals this year. But respondents do not expect inflation to accelerate further: Their average 12-month headline CPI forecast held at 3.6 percent.
The forecast hasremainedrelatively stablefor the past five months butremains0.3 percentage points above the 3.3 percent averagerecorded at the start of the year. The increase followed the start of the war inIran, whenCEOs raised their inflation expectations.
“Inflationary factors leading to rapid and sustained price increases are squeezing our margins severely and pricing some of our products out of the market,”saidTim Zimmerman, CEOofMitchell Metal Products.
Some CEOs expect inflationary pressure to ease as geopolitical disruption subsides.George Sheth, managing partner at Diligent Partners,expects “the Iran war to be over, affordability for the general consumer to improve, inflation to be more in control and pent-up demand to come to fruition in a number of sectors.”
A Matter of Execution
Despite rising optimism, several CEOs acknowledged the challengesbusiness leaders continue to face.One travel-and-leisure CEO pointed to declining consumer confidence, political turmoil, electionuncertaintyand drought conditions. With some consumers cutting discretionary travel, the CEO called the trend “a canary in the coal mine.”
Still, many CEOs expect their companies to end 2026 in better shape than they began it—even when they hold a negative view of the broader environment.The survey finds only a weak relationship between CEOs’ views of overall business conditions and their forecasts for their own companies.
Even among CEOs who expect business conditions to worsen over the next year, 83 percent forecast revenue growth and 71 percent expect profits to increase.
Pessimistic CEOs were also themost likely ofthe three groups to forecast revenue growth: 83 percent, compared with 79 percent of neutral CEOs and 66 percent of optimists.The pattern suggests that many leaders separate their view of the broader environment from their expectations for their own companies.
Profit-growth expectations were more consistent, ranging from 65 percent among optimists to 72 percent among neutral CEOs and 71 percent among pessimists.
One finding may help explain that confidence: 53 percent say strong execution and organizational alignment is the biggest driver of achieving their company’s goals this year.
Among CEOs polled in August, 75 percent expect 2026 revenue to exceed 2025 levels, up from 73 percent in July androughly inline with the start of the year. Sixty-nine percent forecast higher profits, up from 65 percent in July and 67 percent in January.
Capital spendingshowed the largest month-over-month rebound. Fifty-one percent plan to increaseCapEx, up 12percentage pointsfrom 39 percent in July and 6 points from 45 percent in January.
At the same time, 73 percent expect operating expenses to rise.
Hiringremainsthe laggard: 47percent expect to increase headcount, up from 43 percent in July but below the 53 percent who planned to add employees at the start of the year.
For many, that puts the emphasis back on execution.“Like many business leaders, I am navigating the uncertainty,” said one CEO respondent,“and my focus remains on supporting our people, strengthening customer relationships and preparing the business to take advantage of opportunities when the market improves.”
