CEO Confidence Crashes as Tariffs Bite and Growth Slows

America's top business leaders are growing increasingly pessimistic about the economic outlook, according to the latest Conference Board Measure of CEO Confidence, which fell sharply to 47 in the second quarter of 2026 — down from 59 in Q1. Any reading below 50 means negative outlooks outnumber positive ones.

Only 15% of chief executives said the economy is better than six months ago, down from 39% in the first quarter. By contrast, 47% said conditions are worse — up dramatically from just 8% in Q1. The deterioration reflects a combination of factors including persistent inflation, rising financing costs, and the ongoing impact of trade tariffs.

A full 61% of business respondents reported that tariffs have had a negative impact on their costs, with many saying they have had to pass those increases on to consumers. The ripple effects are being felt across manufacturing, retail, and logistics sectors.

The macroeconomic backdrop remains mixed. US GDP grew at an annualized rate of 1.6% in the first quarter of 2026, supported by exports, investment, consumer spending, and government outlays — but economists warn that the second quarter may show further deceleration.

In Asia, the picture looks brighter. South Korea reported a surge of 139% in exports of high-end AI chips in Q1, and Taiwan's government expects the economy to expand by 9.6% for the full year, driven by semiconductor demand.

AI is also beginning to reshape workforce planning. According to a JPMorgan business outlook survey, 27% of business leaders anticipate some headcount impact from AI tools in 2026, as companies move from pilots to production deployments of automation technologies.