UK SME leaders remain cautious on growth, AI & EU expansion
The latest Vistage CEO Confidence Index reveals a mix of cautious optimism and ongoing concerns among small and medium-sized enterprise (SME) leaders in the UK and Ireland.
The survey, which collects views from business leaders across the region each quarter, shows that confidence has edged up slightly, with the index rising to 89.5 in the second quarter of 2025 from 87.5 in the previous quarter. However, a significant number of SMEs remain wary about the outlook for international expansion, trade competitiveness, talent, and the adoption of artificial intelligence (AI).
According to the report, 48% of SME leaders believe that economic conditions have worsened over the past year. Despite these difficulties, 55% still anticipate growth in sales revenue over the next twelve months, although only 43% expect profitability to improve in the same period. Investment intentions reflect this cautious air, with around 31% planning to boost fixed investment and 27% expecting to scale back.
Cost pressures remain significant, as more than a third (34%) of businesses plan to raise their prices in the coming three months, with a majority of these businesses targeting increases between 4% and 6%.
Post-Brexit competitiveness
Over half of business leaders, 51%, expressed concerns that the UK is losing out to EU markets in terms of competitiveness following Brexit. Only 8% of those surveyed view the UK as becoming a more competitive trade hub. When asked about their international ambitions, just one in ten firms said they are actively considering expanding into the EU market.
Recent trade agreements and policy proposals have not had a decisive impact either. Nearly 40% report that they are reconsidering their approach to EU markets but have made no firm decisions, while 38% say recent deals have had no impact on their strategic plans. The proposed UK-EU youth mobility scheme, intended to enhance access to talent, also met with a muted response. Almost half (46%) believe it will have little to no effect on their hiring needs, and only 5% think it will substantially help with talent shortages.
Leadership resilience and work-life balance
The data also highlights the effects of ongoing economic pressures on business leaders themselves. Nearly one in five CEOs described their work-life balance as poor, with 43% experiencing occasional burnout and 20% reporting frequent burnout episodes. Difficulties in disconnecting from work remain pronounced, as almost 60% say they struggle to fully switch off during time off, and only about a quarter report being able to completely disconnect when taking breaks.
AI uptake and skills challenges
The adoption of AI technology among SMEs is also being hindered by a shortage of relevant skills and uncertainty over strategic direction. Nearly half (44%) of respondents cited a lack of technical expertise as a barrier to effective AI implementation. Similarly, 43% reported not having a clear strategy or roadmap for AI adoption, while one in four highlighted internal resistance to change as a delay to embracing new technologies.
"Our Q2 findings reveal a nuanced landscape for UK SMEs. While many leaders are grappling with uncertain economic conditions, they maintain a cautious optimism about individual prospects. In the face of geopolitical uncertainty, particularly concerning international and EU trade expansion, few are ready to commit to expansion. At the same time, the challenges around AI adoption underscore a wider and more urgent talent gap that must be addressed to maintain long-term competitiveness on the global stage. At Vistage, these are the kinds of issues we hear about every day in conversations with business leaders - where peer insights, shared experience and practical support help make a real difference in building a more resilient, forward-looking, and competitive SME sector," Rebecca Drew, Managing Director, Vistage UK and Ireland said.
While SMEs continue to navigate a challenging domestic and international environment, these findings suggest that many are adopting a disciplined approach as they pursue growth, make investment decisions, and consider the technological advances shaping their industries.
