UK and Irish SME leaders are showing signs of cautious optimism despite mounting challenges in international trade, AI adoption and leadership burnout, according to the latest Vistage CEO Confidence Index.
The Index, which tracks sentiment among small and mid-sized business leaders, rose modestly to 89.5 from 87.5 in the first quarter. While resilience remains a defining trait of the sector, the survey of business leaders paints a complex picture: over half (55%) expect higher sales in the year ahead, but only 43% are confident about improving profitability. A further 31% plan to increase fixed investment, though nearly as many (27%) intend to cut back.
Concerns around the UK’s post-Brexit trade position remain widespread. Just 8% of SME leaders believe Britain is becoming a more competitive trading hub, and only 10% are actively pursuing expansion into the EU. Over half say the UK is losing ground to European and global rivals.
Recent efforts to reset trade relations, including the UK-EU youth mobility proposal, have had limited impact on business strategy. While 40% of leaders are reassessing EU opportunities, most have yet to act. Meanwhile, 46% say the youth mobility deal will make little difference to their hiring, and just 5% believe it will meaningfully address talent shortages.
More than a third (34%) of SMEs expect to raise prices in the next quarter, with over half of those planning increases of between 4% and 6%. The move reflects persistent inflationary pressure, as firms look to preserve margins in the face of rising operational costs.
Although interest in AI is rising, implementation is being hampered by a lack of talent and strategic direction. Nearly half (44%) of SMEs say they don’t have the technical skills to deploy AI effectively, and 43% cite the absence of a clear strategy. Resistance to change is another factor: one in four leaders say employee reluctance is slowing adoption of new technologies.
Economic uncertainty is also taking a toll on SME leadership. Almost one in five CEOs rate their work-life balance as poor, while 43% report occasional burnout and 20% say it occurs frequently. Nearly 60% struggle to disconnect during time off — a signal that sustained pressure is weighing heavily on decision-makers.
Rebecca Drew, Managing Director of Vistage UK and Ireland, said: “Our Q2 findings reveal a nuanced landscape for UK SMEs. Leaders are facing geopolitical uncertainty and skills shortages, particularly around AI, but many remain resilient and cautiously optimistic. In a sector where practical peer support and shared learning can shape real outcomes, Vistage continues to see the power of community in helping leaders build forward-looking, competitive businesses.”
Despite the headwinds, the Index shows that UK and Irish SMEs are navigating 2025 with pragmatic optimism. With strategic investments in talent, technology and pricing, many are positioning for long-term resilience — even as broader macroeconomic conditions remain turbulent.
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SMEs cautiously optimistic despite trade fears and AI talent gap, says Vistage