Volatility and uncertainty erode confidence [WSJ/Vistage April 2025]

Among policy shifts, none are weighing more heavily on small businesses than tariffs. Tariff impact isn’t just about added cost — it’s about strategic paralysis. The abrupt imposition, reversal and reimposition of tariffs have created an environment where long-term planning feels impossible.

That paralysis has led the WSJ/Vistage Small Business CEO Confidence Index to drop another 15.7 points from March to April, reaching 69.7. Once again, the key driver is economic pessimism, as the latest survey reveals that 57% of small businesses expect the U.S. economy to worsen over the next 12 months, a 43-point increase since January.

Negative impacts of tariffs are far-reaching

Now more than 7 in 10 (72%) of small businesses expect negative impacts from changes to trade and tariff policies. This growing proportion is an indication that the impacts of tariffs are beginning to affect demand for even those who are not directly impacted. While concerns about immigration, labor laws and tax policy persist, it’s the unpredictability of tariffs that’s most destabilizing.

The result is a growing wave of defensive decision-making, characterized by postponed investments, paused hiring and pricing shifts driven more by risk management than by opportunity. Indeed, there was a significant drop in demand as evidenced by revenue projections among small businesses. Over 1 in 4 of small businesses (27%) expect decreased revenues in the year ahead, nearly double last month’s 14%.

Softening demand has downstream effects on the workforce as well. The proportion of small businesses planning to decrease personnel in the next 12 months has grown to 18%. While this figure may be impacted by productivity gains from leveraging new technologies like AI and embracing automation, reductions are more likely a response to softening demand. Certainly, it will be crucial for all small businesses to examine operational efficiencies during this time, taking advantage of slow periods to further enhance their operations.

The cyclical nature of rising prices

As businesses become more conservative in their spending, a significant factor is the need to cover increased prices. Over half (55%) of small business leaders report that the prices they are paying for goods and services have risen by more than 4%. With the March inflation rate at 2.8%, this indicates that the costs small businesses face are greater than the pace of inflation; in fact, 30% of small businesses report increases exceeding 7%.

Passing costs on to customers is the most common strategy. Our April data shows that 47% have increased prices since the beginning of the year, and 60% of small businesses plan to raise their prices in the next 3 months. This cycle of cost increases followed by price increases will only drive inflation up in the future.

The result? Small business confidence can’t gain traction in an environment where trade policy is unpredictable and ever-changing, and prices are on an upward trajectory, eroding future demand. Constant forecasting and evaluation of pricing playbooks are necessary for small businesses to mitigate uncertainty and maintain margins.

April highlights

The April 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 April 7 and 14, 2025, collected data from 508 respondents with annual revenues ranging from $1 million to $20 million.

• Current economy: Nearly 6 in 10 (58%) small businesses believe the U.S. economy is worse than a year ago, a 16-point increase from last month, while just 14% believe the economy is better, a 22-point drop since the beginning of the year.
• Future economy: Pessimism rose for the fifth month, with 57% of small businesses expecting the U.S. economy to worsen in the next 12 months, a 14-point increase from March. Economic optimism among small businesses also declined, with just 1 in 4 (25%) believing the economy will improve in the next 12 months.
• Revenue projections: Demand is softening as 45% of small businesses expect increased revenues over the year ahead, a 15-point decline from last month. More significant is the proportion of small businesses that expect revenue decreases in the next 12 months, which has nearly doubled from 14% in March to 27% in April.
• Profitability projections: Slightly more than a third (35%) of small businesses expect profitability to improve in the next year, a 12-point decline from last month, while an equal proportion (35%) expect declines in profitability.
• Fixed investment plans: Plans to decrease fixed investments increased by 13 points, with 29% of small businesses expecting to reduce their fixed investments. This is the same proportion as those planning to increase fixed investments.
• Workforce expansion plans: Just 35% of small businesses plan to increase the size of their workforce in the next 12 months, while the proportion of those planning to decrease has risen to a recent record of 18%.

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

The May 2025 WSJ/Vistage Small Business CEO Confidence Index survey will take place from May 5 to 12, 2025.

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