The latest survey from The Conference Board shows CEO confidence rises in the third quarter, though concerns about costs and inflation remain. The index increased to 49, up from 34 in the second quarter. While the level is still below 50—indicating more negative than positive views—the report reflects stronger sentiment about the economy’s resilience and progress in trade negotiations.
Recession fears also eased significantly. In the second quarter, 83 percent of CEOs expected a recession within 12 to 18 months. That figure dropped to 36 percent in the most recent survey, signaling a shift toward cautious optimism among business leaders.
Mixed Outlook Despite Higher Confidence
The Conference Board survey highlights both improved sentiment and ongoing challenges. While CEOs expressed more confidence in economic stability, many remain focused on managing cost pressures. The majority reported higher costs for suppliers (71 percent), materials (64 percent), and technology (63 percent).
In response, companies plan to pursue strategies such as adopting productivity-enhancing technology (93 percent), negotiating with suppliers (89 percent), and reducing operating expenses (73 percent). Yet nearly two-thirds of CEOs, or 64 percent, said they expect to pass costs on to consumers. This move could place added strain on households and contribute to future inflation.
Economic Stability Remains Key Concern
Although recession fears have fallen sharply, the index remains below the neutral 50 mark, suggesting caution remains the dominant outlook. Analysts note that business leaders are balancing optimism about growth with ongoing uncertainty in global trade and supply chain dynamics.
The reliance on technology to manage costs reflects broader trends across industries. From automation in manufacturing to artificial intelligence in service sectors, businesses are increasingly leaning on digital tools to maintain margins. At the same time, passing costs on to consumers may test economic resilience if households face higher prices while wages remain stable.
Implications for Consumers and Businesses
For local communities, including those in the San Gabriel Valley, the results suggest that while large companies see the economy holding steady, everyday prices may continue to fluctuate. Families and small businesses alike could feel the impact if larger firms transfer rising costs to consumers.
As CEO confidence rises, the balance between economic resilience and inflation risk will remain a central focus heading into 2026. The Conference Board will release its next update later this year, offering more clarity on whether optimism continues to strengthen or if pressures on costs and consumers reshape the outlook.
For the full survey results, visit The Conference Board or read coverage from Reuters.
