The report highlights growing economic challenges as confidence amongst business leads falls from 91.4 to 87.5, with more than half (53%) of business leaders observing economic decline in the UK in 2025, and 41% anticipating further deterioration over the next 12 months.

This sentiment follows the Chancellor’s Spring Statement, where support for SMEs remained limited, further compounded by significant cuts to welfare benefits that are expected to impact consumer spending.

Leaders push for office return

As SMEs navigate workplace strategies for 2025, a growing number of business leaders are advocating for the return of traditional office settings. Over a third (34%) of SME business leaders support the return to the office five-days per week. In fact, 21% believe that it would boost productivity and collaboration, while 34% say it would strengthen company culture and team cohesion.

This drive to reinforce team dynamics is also reflected in SME hiring plans, which show a cautious but optimistic outlook. Despite economic challenges almost a third (31%) plan to invest in talent acquisition and growing headcount.

Small businesses embrace AI

As AI continues to reshape the business landscape, SMEs are making sure they don’t fall behind in adoption and application. Nearly two-thirds (65%) of individuals and 70% of CEOs are actively engaging with AI, highlighting its benefits in driving business efficiency across SMEs.

To ensure its use is both effective and responsible, SME business leaders are taking proactive steps. Nearly half (46%) have introduced formal AI policies to provide clear guidelines, and 50% are investing in training sessions to upskill employees to seamlessly integrate AI into their business operations.

Business leaders to expect revenue growth in 2025

Despite economic headwinds, business leaders remain confident in their performance outlook. Over half (56%) anticipate an increase in their firm’s sales revenues over the next 12 months. However, profit expectations are more cautious, with only 38% expecting higher profits and another 38% predicting profits will remain broadly the same.

Looking ahead to long-term investment, 34% of business leaders plan to increase spending in 2025, while 44% expect it to remain the same.

Rebecca Drew, Managing Director, Vistage International said: “Our latest CEO report highlights that while SMEs are navigating significant economic uncertainty, their resilience remains strong. Despite a drop in confidence levels, with many leaders feeling the pressure, it’s encouraging to see that over half are still expecting revenue growth. Another key trend we’re seeing is the growing emphasis on strengthening team dynamics, whether by bringing teams back into the office or integrating AI to improve business efficiency. With the recent Spring Statement introducing further budget cuts, businesses are now dealing with additional challenges. Yet, it’s promising that many leaders continue to invest in talent and innovation. At Vistage, we’re supporting these leaders to navigate these shifts and make decisions that set them up for long-term success. The ability to adapt, invest in the right areas, and make bold decisions will be what ultimately separates the thriving businesses from those that struggle in the coming months.”

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