The economic landscape has been a rollercoaster ride, especially for small businesses. But there’s a glimmer of hope on the horizon. A recent Vistage CEO Confidence Index survey reveals a growing optimism among CEOs as we navigate the post-pandemic recovery. This is a significant shift, and it’s worth exploring what it means for female small service-based business owners.
The survey, which gathered responses from 1,768 CEOs, showed the Confidence Index rising for the fourth consecutive quarter, reaching 85.9 in Q1 2024. This rise indicates a growing confidence among CEOs, especially when compared to the low of 69.0 from Q2 2022. However, it’s important to note that this rise only brings us back to the bottom of the growth decade of 2010. So, while the momentum is encouraging, it’s clear that CEOs need to invest in their businesses to fully leverage this upward trend.
The primary driver for the increase in the CEO Index was an improved economic sentiment. Expectations for revenue and profits remained steady compared to the previous quarter. However, the minor uptick in investment plans was offset by a drop in planned hiring increases. This suggests that while the economy is recovering, the labor market remains a challenge.
Interestingly, over a quarter of CEOs (26%) plan on increasing salaries in 2024, with 47% holding salaries steady. When asked about the biggest source of inflation impacting their businesses, a whopping 65% of CEOs identified labor as the main culprit. This indicates that the labor market, while currently cool, could quickly overheat when the projected 2025 growth cycle begins.
Inflationary pressures continue to squeeze businesses, with customers cutting back due to increased costs. Health insurance premiums are skyrocketing, adding to the financial strain. Despite these challenges, over half (53%) of CEOs believe the inflation rate will slow, lowering the growth rate in the year ahead. However, rising costs for materials, equipment, services, and labor are forcing CEOs to consider another round of price increases.
So, what does this mean for female service-based small business owners? It’s a mixed bag. On one hand, the growing CEO confidence is a positive sign, indicating a potential recovery and growth in the economy. On the other hand, the challenges in the labor market and the rising costs of doing business can’t be ignored.
However, this period of slowing demand presents a unique opportunity. It’s the perfect time to invest in your team and prepare for the forecasted growth cycle in 2025. As a small business owner, you have the flexibility to adapt quickly to changing market conditions. Use this to your advantage.
While the road to economic recovery may still be long, the growing CEO confidence is a beacon of hope. It’s a reminder that with resilience, adaptability, and strategic planning, we can navigate these challenging times and come out stronger on the other side.
Let’s prepare for that 2025 growth cycle.
