This article first appeared in The Edge Malaysia Weekly on July 13, 2026 - July 19, 2026
THE Vistage CEO Confidence Index climbed 6.1 points or 8.4% from the first quarter to 78.2 in the second quarter survey ending June 2026. The uptick in confidence follows a framework agreement between the US and Iran to end the four-month long conflict that has disrupted one of the world’s most critical energy corridors and shook international markets.
The index however remains 14.2% below the previous year’s level indicating that confidence level remains cautious.
What the Index components show
Except for current economic conditions, Vistage CEOs were more upbeat in the other five components (see table).
Current economic conditions: The component index fell by another eight points to 59 in the second quarter. The CEOs opined that current economic conditions continue to be challenging as the index declined by 11.9% from the previous quarter and by 28.0% compared to the same quarter in the previous year.
Expected economic conditions: This component index rose by 55.6% to 70 points from 45 points in the previous quarter. The CEOs expect the peak of the global energy crisis may be behind us. Despite the rebound, its level is 28.6% below that in the previous year, pointing to continuing challenging economic conditions in the coming quarters.
Expected change in employment: The component index improved by 5.3% from the previous quarter to 120 in the current quarter. It is 7% below the previous year but hiring intentions remain strong as the index remains above the 100 mark.
Planned fixed investment: This ticked up 9.4% to 116 points pointing to more upbeat investment expectations. CEOs’ planned fixed investment remains at seven points below the previous year’s level, indicating a moderating trend since its peak in 4Q2025.
Expected revenue growth: Expectations on revenue growth edged up slightly by 3.4% to 120 points in 2Q2026 although it remains at 11.8% below the previous year.
Expected profit growth: Mirroring topline expectations, the CEOs see stronger improvement in profit growth, rising by 9.3% to 106 points in 2Q.
Distribution of CEO sentiments
Smaller share of ‘optimistic’ CEOs
The share of “optimistic” CEOs has improved in the current survey from the previous quarter for five of the six index components, with the exception of the current economic conditions component. These shares of CEOs expecting improving conditions and company performance are however much smaller compared to late 2025.
Smaller but elevated share of ‘pessimistic’ CEOs
Mirroring the distribution of CEOs expecting improvements, the share of those anticipating deterioration or decline edged downward for five of the six index components, with the exception being the current economic conditions component. Notably, the share of CEOs anticipating a decline in expected economic conditions dipped from 66% in 1Q to 47% in 2Q, reflecting CEOs’ favourable expectations the US-Iran peace deal will bring about stability in the Gulf region and open passage through the Strait of Hormuz for all ships.
Rise in proportion of CEOs expecting no change
The proportion of CEOs who expect no change has risen for current economic conditions (35% to 37%), expected economic conditions (23% to 36%), planned fixed investment (40% to 42%), expected revenue growth (34% to 36%) and profit growth (35% to 38%) while employment expectation was unchanged at 40% for 1Q and 2Q 2026.
How CEO sentiment has shifted: A component-by-component view
Examining the proportional shifts in CEO expectations — whether they foresee improvement, deterioration, or no change — reveals a clear and consistent pattern across all six components. Below, we break down the key takeaways for each metric.
Current economic conditions: Further worsening
The proportion of CEOs expecting current conditions to worsen rose to 52% in 2Q2026, up from 49% in the prior quarter. Meanwhile, only 11% anticipate improvement, down from 24% in the previous quarter. The share of CEOs seeing no change edged up slightly by two percentage points to 37%, suggesting current economic conditions remain the same for a sizeable proportion of CEOs. The continuing deterioration reflects the cumulative drag of elevated fuel, transport, freight, and insurance costs, compounded by lingering shipping disruptions in the Strait of Hormuz. Despite the recent US-Iran framework agreement, CEOs indicate further decline in operating conditions. Even as headline risks subside, CEOs are still feeling the aftershocks of the energy crisis.
Expected economic conditions: A decisive turnaround
The 2Q2026 data marks a clear inflection point in how CEOs view the economic outlook. After the previous quarter’s plunge, sentiment has brightened considerably.
The proportion of CEOs expecting better economic conditions ahead rose to 17% in Q2, up from just 11% in the prior quarter. The share of CEOs anticipating worsening conditions over the next six months fell sharply, dropping from 66% to 47% in a single quarter.
Employment: Hiring intentions firm up
The 2Q2026 data signals a modest but welcome improvement in CEO hiring intentions, reinforcing the view that the labour market remains on solid footing despite broader economic headwinds.
The share of CEOs expecting to add workers edged up to 35% in 2Q2026, up from 32% in the prior quarter. At the same time, those planning workforce reductions eased to 15% from 18%. The three-percentage-point (pp) decline suggests layoff fears are receding. Notably, the proportion of CEOs keeping employment stable held steady at 50% as in the previous quarter. Half of all CEOs are maintaining their workforce, consistent with the broader rebound in expected economic conditions. As fears of a prolonged energy crisis subside, CEOs appear more willing to retain and modestly grow their workforces. It also suggests that widespread layoffs are not on the horizon.
Planned fixed investment: A cautious rebound
After a steep drop in the prior quarter, investment intentions have staged a modest recovery. The proportion of CEOs planning to increase fixed investment edged up to 37% in 2Q2026, from 34% previously. More notably, those intending to reduce investment fell to 21%, down from 27%, a solid six-pp improvement.
Still, the overriding sentiment is one of measured caution. With 42% of CEOs holding investment steady, up from 40%, the majority are choosing to wait rather than commit. The rebound remains tentative as many businesses appear to be adopting a “wait-and-see” stance before scaling up capital expenditure.
Revenue expectations: Fading downside
The revenue outlook is gradually firming, driven largely by a reduction in pessimism rather than a surge in optimism. In 2Q2026, the share of CEOs expecting revenue growth nudged up to 42%, while those anticipating contraction fell more decisively from 25% to 22%.
At the same time, the proportion of CEOs expecting revenue to remain unchanged rose to 36%, up two percentage points, suggesting a positive directional signal even if the pace of improvement remains modest.
Profit expectations: A reversal in pessimism
Profit expectations have posted significant improvement this quarter, mirroring the brighter revenue outlook. The share of CEOs expecting profit growth edged up to 34%, from 31% in the prior quarter. However, the standout shift is the six-pp decline in profit pessimism from 34% down to 28%. This improvement suggests that CEOs are beginning to see early signs of margin relief. Stabilising energy and feedstock costs, likely driven by the US-Iran framework agreement, appear to be the key drivers. Meanwhile, the proportion of CEOs expecting profits to remain unchanged rose marginally to 38%, up from 37% previously.
Overall, the data points to a gradual, albeit cautious, recovery in earnings confidence. The pessimism that dominated previous quarters is receding, but many CEOs remain in wait-and-see mode.
Orders and selling prices
Export confidence surges as domestic demand stabilises
The 2Q2026 data reveals a clear divergence in demand expectations. Local orders are showing a modest rebound. Export orders, however, are seeing a stronger surge, in line with the expected recovery in global markets.
On the export front, the impact of the US-Iran ceasefire is clear. The share of CEOs expecting higher export orders jumped to 39%, up from 35% in the prior quarter. Those anticipating declines plummeted from 27% to just 16%. The 11-pp swing indicates a clear signal of renewed confidence in international markets.
By contrast, local orders are firming more gradually. The proportion of CEOs expecting higher domestic orders edged up to 36%, from 34%. Those expecting declines eased slightly to 22%, down from 23%. The improvement is positive but measured, suggesting that domestic demand is stabilising rather than accelerating.
Global markets are leading the recovery. CEOs with export exposure are seeing the clearest signs of improvement. Meanwhile, domestically focused leaders remain in wait-and-see mode. This divergence underscores the importance of geopolitical stability for trade-dependent sectors.
Selling prices: Pressures to raise prices have eased considerably
Pricing pressures have cooled markedly in 2Q2026. The share of CEOs intending to raise selling prices fell sharply to 40%, down from 58% in the prior quarter. That represents a significant 18-pp drop. Meanwhile, the proportion of CEOs planning to reduce prices doubled from just 6% in 1Q to 12% this quarter. At the same time, the share holding prices steady surged to 48%, up from 36%.
The 12-pp jump in price-holding firms signals a stabilising trend. With more CEOs either holding or cutting prices, the concern over relentless price increases appears to be behind us. Overall, the data points to a more balanced pricing environment heading into the second half of the year.
Ringgit impact and preferences
The ringgit appreciated 10.2% against the US dollar in 2025. It has continued on an upward trend so far this year. CEOs were asked about the effects of these currency movements on their business over the past six months.
For nearly half of respondents (48%) the impact has been minimal or none at all. On the positive side, 28% described the currency effects as somewhat positive, while a further 3% reported a very positive impact from the ringgit’s appreciation. Together, nearly one-third of CEOs have benefited from the stronger currency.
However, not all have fared well. Some 18% indicated that the effects were somewhat negative, and 4% said they were affected very negatively. In total, over one-fifth of businesses have experienced headwinds from the Ringgit’s rise, likely those with significant export exposure or US dollar-denominated revenues.
Overall, while the majority of CEOs have either seen little effect or modest gains, a meaningful minority continue to face currency-related challenges.
When asked about their preference for the future direction of the ringgit, responses were varied. More than a third of CEOs (35%) expressed a preference for continued appreciation against the US dollar. A similar proportion, 31%, favour stability around current levels. Together, these two groups account for nearly two-thirds of all respondents, indicating a broad desire for either a stronger or steady ringgit.
At the other end of the spectrum, 16% of CEOs prefer a moderate depreciation against the US dollar. Meanwhile, 10% would like to see lower volatility, regardless of the ringgit’s direction, suggesting that predictability matters more to them than the currency’s absolute value. The remaining 9% are indifferent to ringgit movements.
On the whole, while the largest share favours further appreciation, the data reveals no clear consensus. A significant share of CEOs prioritise stability or predictability over a specific directional outcome.
Labour market shifts and workforce age profiles
Mixed labour market signals
The labour market is sending mixed signals across industries: manufacturing firms are scaling back headcount, while service companies continue active hiring — y et struggle with persistently high turnover rates. In response, CEO experiences and strategies vary widely. A quarter (26%) are recruiting only for critical roles, 20% are keeping headcount steady, and 19% are expanding their workforce. Meanwhile, 8% are turning to productivity improvements or automation instead of adding staff. A further 6% are reskilling or redeploying existing talent, and the same share (6%) are reducing headcount. Another 6% are hiring but facing significant churn, while 5% report no major workforce issues, and 4% have implemented a hiring freeze.
Across all response categories, the services sector consistently accounts for the largest share of respondents, ranging from 54% to 72% per strategy. Manufacturing represents the second-largest sector overall, followed by construction, other industries not elsewhere classified, and agriculture, which collectively make up the remainder.
Notably, the services sector is most dominant among firms that have frozen hiring (72%) and those hiring but facing high turnover (70%), suggesting that service-oriented businesses may be grappling with both recruitment caution and retention challenges. Conversely, manufacturing respondents are overrepresented in headcount reduction strategies (32%) and productivity/automation-focused responses (30%), indicating a stronger inclination toward operational efficiency and workforce consolidation in that sector.
Agriculture, while accounting for only 1% of total responses, shows a slightly higher presence (6%) among firms reporting no significant workforce issues, perhaps reflecting a more stable or seasonal labour dynamic. Construction and other industries maintain relatively consistent shares across most categories, with minimal deviation from their overall averages of 10% and 7%, respectively.
Overall, the sectoral distribution underscores a services-dominated respondent base, yet the intra-category variations offer meaningful insights into how different industries are tailoring their workforce strategies in response to current labour market conditions.
Gen Z and Millennials dominate workforce
Younger generations form the backbone of the workforce across most companies surveyed. When asked which age group constitutes the largest share of their employees, 52% of CEOs identified the 25–35 age bracket as dominant. An additional 3% reported that staff under 25 make up the majority of their workforce, meaning that over half (55%) of surveyed companies are primarily composed of Gen Z and Millennial employees.
A substantial 36% of companies indicated that the 35–44 age group is the most represented in their organisation, pointing to a strong mid-career presence. In contrast, only 8% of firms are dominated by workers aged 45–54, and just 1% by those in the 55–64 bracket, highlighting a sharp dropoff in older workforce representation. Taken together, these figures underscore a clear generational tilt toward younger talent, with implications for succession planning, skills development, and long-term organisational resilience.
How long do Gen Z and Millennials stay in their roles?
CEO responses reveal a fairly concentrated tenure pattern among employees under 35. The most common response cited by 29% of CEOs was a tenure of three to less than five years, closely followed by 28% who reported two to less than three years. Together, these two bands account for over half of all responses, suggesting that early-to-mid-career workers typically remain in their roles for a moderate period before moving on.
Vistage Malaysia has engaged Professor Dr Yeah Kim Leng as its adviser and collaborator for the quarterly Vistage CEO Confidence Index. Yeah is a distinguished Malaysian economist with extensive experience in academia, policy advisory and economic research. He currently serves as a Professor of Economics and director of the Economic Studies Programme at the Jeffrey Cheah Institute on Southeast Asia, Sunway University. Yeah also holds several notable positions, including president of the Malaysian Economic Association, trustee of the Malaysia Tax Research Foundation, and member of the National Consumer Advisory Council at the Ministry of Domestic Trade and Consumer Affairs. In April 2025, he was appointed as an adviser in the Policy Advisory Committee to the Prime Minister.
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