Europe CEOS on Economic Outlook, Business Prospects & Risk

Intro: You are listening to C-Suite Perspectives, a podcast by The Conference Board. 

Sara Murray: Welcome to C-Suite Perspectives, a signature series by The Conference Board. I'm Sara Murray, Managing Director International at The Conference Board and guest host of today's episode. Today we're discussing the latest results from our European CEO Confidence Survey and what they reveal about the outlook for business leaders across the region. 

CEO confidence in Europe remains in negative territory for the fourth consecutive reporting period as executives continue to grapple with geopolitical volatility, energy and security, weak growth prospects, and ongoing concerns about Europe's long-term competitiveness. 

At the same time, the findings reveal a more nuanced picture. While macroeconomic sentiment has deteriorated, some company-level expectations have shown signs of resilience even as concerns around investment and employment in the broader external environment persist. Joining me is Alejandro Fiorito, economist at The Conference Board Europe. Welcome.  

?Alejandro Fiorito: Thanks for having me, Sara. 

Sara Murray: Before unpacking the results, Alejandro, could you give listeners just some context around the survey itself?  

?Alejandro Fiorito:Yeah. This is a survey of CEOs, as the name is pretty self-explanatory, and we do it at The Conference Board in collaboration with the European Roundtable for Industry. We ask leaders of around 60 of the largest non-financial companies in Europe about business conditions and business prospects. These companies are, of course, also multinational, so they have business elsewhere, not just in Europe. 

We've been doing this survey since 2020, twice a year, and it's based on questions that our colleagues in the US have been asking since 1976. We also have results for China since 2022, so we have some comparison points there. 

This latest survey specifically was done between April 10 and April 30, with most responses recorded in late April. This is usually not that relevant but this time it was because, of course, this is a period in which the conflict in the Middle East, the war in Iran, already started to weigh on business. It's also relevant to note that the macroeconomic conditions, oil prices during the time we were carrying out the survey, were not in panic mode. The numbers were not as terrible as they were maybe in March. 

To go back to what we measure, as I said, the name pretty much says it all. We measure how confident CEOs are feeling about the economy in Europe but also elsewhere and their industries. 

We measure this confidence from zero to 100 and a neutral level is 50. When we discuss results that are below 50, that's negative or pessimism. Above 50 is optimism or positive results.  

Sara Murray: Okay. What's really valuable about this survey is that it's capturing Europe's largest industrial companies. From what I understand, you had a 98% response rate from those CEOs. Really looking at current conditions, the outlook ahead. Soit's not just a sentiment survey,it's thinking about investment, employment, and sales, and how that then translates into business decisions. 

?Alejandro Fiorito: Yes, exactly.  

Sara Murray: Okay. How has CEO confidence in Europe changed in this latest survey and what's driving these results?  

?Alejandro Fiorito: The latest reading was 40, which was four points below the previous result in late 2025. Then it was 44. This is a negative result below the threshold or the neutral level of 50. 

As you said, this headline number captures several things. It's mostly explained by a worsening of the macroeconomic outlook. For comparison, we also have the results from the US that just came out and they're at 47. So a little more optimistic but still negative. We don't have yet the numbers for China but in recent surveys China-based CEOs have also been more optimistic than Europeans. 

As I was saying, the overall confidence measure is composed of three questions. The two that perform the worst for CEOs based in Europe are the ones where we ask about current economic conditions and expectations for the economy. That's why we are saying in this latest report that it is the macroeconomic outlook which is what is driving pessimism. Both those components are below 40, which we consider quite a negative level. 

To put in context, there are two striking results. Two-thirds of respondents think that the economic conditions currently are worse than they were six months ago and over 50% expect these economic conditions to deteriorate further in the next six months. This result is quite negative but not that surprising. We know there is a tough external environment with the ongoing conflicts and we'veactually already been doing some downward revisions to the economic outlook in the last few months. 

The third component of the survey is the one that has a little more surprising results perhaps. In this one we ask about industry-specific prospects. That one has improved slightly and is around neutral. It's at 49. This might be related to some very specific idiosyncratic factors for certain industries. 

As you said, we have a lot of different sectors covered and this most likely reflects that European businesses have gotten used to a difficult external environment and are used to dealing with shocks like the one we're experiencing now, without this affecting their operations maybe as significantly as these shocks affected them in the past. SoI think this third component shows some resilience at the business level, even if the macroeconomic outlook is quite negative.  

Sara Murray: The headline is clear though. Confidence has weakened again and remains below the neutral threshold for the fourth consecutive survey. It is a difficult, as you said, external environment. The geopolitical instability, weaker growth prospects are particularly tough. How do the results compare historically?  

?Alejandro Fiorito: As you've very well said, one of the key results is that this is the fourth consecutive survey that's negative. Since late 2024, we are measuring negative confidence, so pessimism, which is quite a long time if we think about it. If we look a little further back, since 2022—so in the last nine surveys—we've only had two positive readings. Seven out of the last nine surveys have been negative for CEOs in Europe. 

This number, concretely 40, it's again negative but not so low. It is above historic lows. The historic lows that we've recorded in the past were the ones following Russia's invasion of Ukraine in the second half of 2022, when the energy shock really hit companies, and more recently when the US announced tariffs in April 2025. During those periods, we had the CEO confidence indicator fall below 30, much lower than we are now. 

I think this tells us that because there's some similarities with the shock we experienced in 2022, the data that we will start collecting in October for the second half of the year and for late 2026, it's going to be quite interesting to see whether we continue the downward trend that we're seeing now. 

Again, these results for the first half of 2026 are quite similar to the ones we had in the first half of 2022. The ones for the second half, it will be key to see whether they stay above 50, even go back a little further up or the shock really materializes and drives down even worse results in terms of confidence. 

Sara Murray: While the results then are not at crisis levels, they do point to a prolonged period of caution among Europe business leaders. There's a persistent gap between how confident CEOs feel about business conditions in Europe and about conditions outside the continent. What do you think explains this? 

?Alejandro Fiorito: Beyond the main headline number that we were just discussing, we also ask about their business prospects in terms of sales, investment, and employment for the next six months; whether companies see their business increasing or decreasing sales, business, and employment. Since all these companies have business in Europe and outside the continent, we ask them to differentiate between those two geographies. 

We have data going back—around 18 surveys in total—where we ask these questions. What we see is that there's always been more negativity, there's always been more pessimism for business prospects in Europe than there is for their business outside of Europe. I think particularly since 2022, this gap has increased and remained large, with business prospects in Europe being negative, below the 50 neutral level, and business prospects outside of Europe being positive. 

The latest results, they improved a little bit for business in Europe but they remain negative at 48, while they are positive outside of Europe. And because we have the three subcomponents, we can pinpoint what part of their business prospects is driving this pessimism in Europe and most of the gap is explained by negativity about investment and employment prospects in Europe. 

There are some interesting trends here where sales have been fairly resilient and even improved in Europe in our latest reading. They are the only positive component and fairly close to sales prospects for business outside of Europe. I think around 42% of respondents expect sales to improve or increase in Europe and 46% to stay about the same. So very few expect sales to decrease. 

Investment is where we see some negativity and investment prospects have been dropping steadily in Europe for several surveys in a row now. Most respondents, 54%, expect capital investment to remain unchanged. Not so low, around 20%, expect capital investment to decrease. So capital expectations, investment expectations in Europe are fairly negative or stagnant. 

Unemployment, the third component, is the one that's been the most negative since 2022, fairly consistently falling in Europe. Interestingly, outside of Europe, we've also seen a deterioration. 46% of respondents now anticipate a moderate reduction of their workforce in Europe in the next six months. This is double what we see outside of Europe, where only 23% expect a reduction of the workforce. Employment prospects, I would say, are in a pretty downward trend for both. 

Sara Murray: This is one of the most revealing findings of the survey, that CEOs continue to see stronger opportunities outside Europe than within. And I just think the gap is this ongoing concern of Europe's growth trajectory, the regulatory environment, the investment attractiveness compared with other regions. It's really revealing. 

We're going to take a short break and be right back with more of my conversation with Alejandro.  

Intro: What does the future of work mean for your employees? How will your company navigate the future of AI? Will there be a global recession? At The Conference Board, our experts translate the latest research and economic analysis into insights and real-time problem-solving for your organization. 

Membership at The Conference Board provides your team with an assortment of knowledge from economics, marketing and communications, governance and sustainability, public policy, and human capital. As a member, you'll have access to our center experts, member-exclusive events, data and benchmarking tools, and peer sharing that will help you understand the present and shape the future. 

Consider becoming a Conference Board member today by visiting www.conference-board.org.  

Sara Murray: Welcome back to C-Suite Perspectives. I'm your host, Sara Murray, Managing Director International at The Conference Board. I'm joined by Alejandro Florido to discuss the latest findings from our CEO Confidence Survey. 

Given the complex external environment, what are companies telling us about how they see geopolitical risk and how are they responding to shocks?  

?Alejandro Fiorito: In this latest survey we ask what geopolitical developments pose the greatest risks for their business. The results are, some of them, pretty unsurprising. Over 50% of respondents say that energy insecurity and accelerating fragmentation are either their first, second, or third main concern. Those are very related to current news. 

If we round out the top five main risks, other issues related to recent conflicts like insecure trade routes, weaponization of critical raw materials, or direct military conflicts are the five main risks for European CEOs. 

The reaction part is where we get some more nuance or relevant results because this links to how they perceive the current conflicts and how these current conflicts are affecting their decisions. 

Despite how large and significant these geopolitical risks are, what companies are telling us right now is that they mostly see a near-term impact and that they're not taking strategic decisions to address them. They're mostly responding tactically. They do not see a structural impact of the current shock. 

Let me give you some examples. First, we ask about whether they are increasing reliance on European providers for economic security reasons and the responses were pretty evenly split. A very slim majority, 51%, told us that they were not relying more on European providers for economic security reasons. Around 45% told us that they were doing it but only moderately and, therefore, only 4%--so very few respondents—told us that they were actually substantially increasing their reliance on domestic providers. 

This, I think, tells us that the "buying European" rhetoric that we've seen a lot in Brussels and elsewhere in Europe is not very successful and that current shocks are not driving a structural change toward more reliance on domestic providers, at least for the European business that we survey. 

When we ask about what specific actions they're prioritizing to deal with the shock, what they told us is they're mostly, again, reacting tactically rather than strategically. Their priorities are mostly reviewing and strengthening supply chain resilience, managing cost, updating contingency plans, adjusting prices. They'revery focused on the direct immediate impact. 

Very few respondents tell us that they're looking for new business opportunities or changing their investment timelines or their capital allocations, which we would consider more structural changes or more strategic decisions. 

What we're really seeing is firms managing the immediate impact and the short-term effects of these current shocks.  

Sara Murray: Indeed. In recent surveys, we've been asking questions about the long-term and medium-term business conditions in Europe and the rest of the world. How have these been evolving?  

?Alejandro Fiorito:They've been evolving quite significantly, across multiple regions and countries. We asked questions in the latest survey about long-term business conditions. In previous surveys, we had asked about the medium term. When we say long term, we mean over three years. When we say medium term, we mean one to three years. 

In this latest one, when we asked about long-term business conditions—and by that we mean the regulatory environment, the attractiveness of investment—we got pretty mixed results and, I think, quite interesting ones. To sum up, for the largest economies—for the EU, for the US and China—CEOs are quite negative about the EU. 

This will not surprise you given the conversation we've been having. Around 60% say that they assess the business conditions in the long term as negative. They are fairly mixed on the US and China, which was quite interesting. They're a bit more positive for the US—40% view conditions during the long term as positive—and 34% view conditions in China as positive. But there are 60% that assess them roughly either neutral or negative for both the US and China. 

The results are very rich because we ask about many different countries and regions. Here I would like to highlight four results beyond these main or largest economies. 

First, I would say bad news for Europe, unfortunately, goes beyond the EU. The UK, we also asked about the long-term business conditions there, and one-third of CEOs told us that business conditions are negative or are going to be negative in the long term for the UK. Only 16% saw them as positive. Across advanced economies, there's some positivity for other G7 and OECD countries like Australia, Canada, Japan, or South Korea. They were more positive. But for European specific countries, they were pretty negative. 

The second result I would like to highlight is for the US, the results for the long term contrast with the responses we got in the past about medium term. In late 2025, we asked about medium-term investment strategies and they were quite positive. For the medium term, 45% of CEOs told us that last year, 2025, they had changed their plans to invest more in the US. And last year was not a normal year, so we consider that to be quite a positive view on the medium-term prospects for the US. Only 10% had changed their plans to invest less last year. But now when we ask about the long-term investment and business conditions, the share that have negative views about the US is relatively large. It's at 27%. 

The third thing I would like to emphasize again, across large economies—but beyond the EU, US, and China—is that the results for India were very positive. So positive I call them surprising. 70% of CEOs have positive views about the long-term business conditions in India, which is the largest share across any country or region that we ask about. 

The fourth point, and to conclude with other emerging market economies, CEOs were quite positive about the prospects for other Asian—you can think Indonesia, the Philippines, large Asian countries beyond India and China—and Latin America. As expected, they're pretty negative about the Middle East, which I think might be short-term shock. But also, I think this signals that while, as we were discussing before, they expect the shock of current conflicts in the Middle East to be near term for their business, for the region, for the Middle East as a whole, they do see a long-lasting effect. 

Sara Murray: Indeed. The contrast is quite striking, in particular that India emerges as a standout growth story. But what explains the negativity about Europe and are there silver linings elsewhere?  

?Alejandro Fiorito: There is a clear trend of persistent negativity about both the macroeconomic outlook and business-specific conditions, as we were discussing about employment and investment particularly. 

A recurrent theme here has been CEOs' frustration with the depth and the speed of reforms in Europe. In the previous survey in 2025, very few—fewer than 20%—told us that they were seeing a positive impact from the reform agenda in terms of single market completion, simplification—the Draghi and Letta agenda, based on those reports. In this survey, we asked a much more direct and specific question about the single market, given in particular that EU institutions have a plan to advance significant legislation to increase the integration of the EU single market. They have stated that they want to do this, pass this meaningful legislation by the end of 2027. 

So we asked CEOs if they expect the single market to be completed, which we mean just EU integration to advance meaningfully. The concerning result is that 65% told us that it won't be completed by 2030, even after the sort of self-imposed deadline. Only 16% thought that it would be completed by 2028 but all of them put caveats on this. They said it would be in a more limited form. It would be a sort of a two-speed solution. 

Of course, I think sometimes we're too harsh on EU institutions and this is not the whole story. But these results are representative of both the challenges and the limitations in terms of response capabilities that we currently have for Europe. 

You also asked about some silver linings, so I will try to get some more positive here. One very positive result for the global economy, but also in a way for Europe, is the positivity that CEOs have about business conditions in India and to a lesser extent about other Asian countries and Latin America. 

I say this also affects Europe and EU institutions because this validates some of the efforts of accelerating trade deals, accelerating collaboration with these other regions. If these regions are going to do well in the long term, this is the right approach for Europe, to further integration and collaboration with them. 

A second positive point is CEOs being so positive about G7. It's quite remarkable, in part because those are also priority partners for the EU, but also because they have similar challenges in terms of demography, growth to Europe. We can learn something about how these other advanced economies are dealing with these shocks but also I think this might signal that perhaps Europe-based business leaders and analysts like ourselves are our own harshest critics. The fact that we are assessing other advanced economies more positively might reflect that there is some sort of structural pessimism here that is very Europe specific. 

Sara Murray: It seems again, the kind of recurrent theme is the concern about Europe's long-term competitiveness, the ability to complete the key economic reforms including the single market. Just building on the strategic relationships the EU should prioritize. What did CEOs tell us about the EU and its key partners? Anything more on that?  

?Alejandro Fiorito: First, I would define strategic relations. In the survey we asked concretely about a strategic relationship and spent some time thinking about what do we mean by this. The way we frame it is sustained cooperation across many areas: we listed trade and investment, supply chains, but also technology, security, climate change. We ask CEOs which countries and regions the EU should prioritize for deep strategic relations that go across many different sectors or priorities. 

The main results are to be expected. CEOs think that traditional partners like the UK and the US should continue to receive high priority. Even though CEOs are quite negative about business prospects in the UK, they still see the UK as the key partner. If we did a ranking, the UK would come first here, which shows, I think, that these strategic partnerships and the logic behind them goes beyond the economic rationale or the business, and it's about shared values, shared culture. 

For the US, it's interesting too that despite some turbulence in the relationship recently, over 90% of the CEOs think that the EU should give the US high or moderate priority. Here I would put the US and China, despite a very different relationship, in a similar bucket where they're inevitable partners, right? 

On China the results are a bit more mixed in the sense that a lower share tells us that the EU should give high priority to China. Still close to 80% think that China should be given moderate or high, but I think only 40% said that the EU should give China high priority. 

This won't be surprising given the positive results we've emphasized for the Indian economy but beyond the US and China, CEOs consider India should be given the highest priority. The numbers for India are better actually than for China. Close to 60% say that the EU should give India high priority and that number, just the high priority share, is also higher than for the US, which is 53%. 

We can take one final positive message from these results in terms of strategic partners, and is that CEOs in Europe still see the case for European integration and cooperation. Beyond the UK we ask about what we call Greater Europe—mainly Switzerland and Norway—as partners. 

What we get is that this should be given second-highest priority. So UK, Greater Europe, and India actually come out as the top three priorities for Europe. And this, I think, signals as well an openness to the rest of the world that we should welcome. 

There is no region that the CEOs think it's not important for the EU to establish strategic partnerships. That persistent openness, even in a fraught external environment, even with growth headwinds, is what remains good news from this survey.  

Sara Murray: This reflects a pragmatic view from business leaders, that CEOs see maintaining strong ties with the traditional partners—like you said, the UK, Switzerland, Norway, and US—is important. But they also recognize the growing importance of India and other advanced economies. It just seems that Europe needs a broad and diversified network of partnerships to strengthen competitiveness and resilience in what's an increasingly fragmented world.  

?Alejandro Fiorito: Yes, absolutely.  

Sara Murray: Taken together, these results paint a picture of European CEOs who remain cautious about the continent's economic outlook but are actively adapting to a more complex and a more uncertain world. 

That actually brings us to the end of this episode. Thanks to all of you for listening to C-Suite Perspectives. I'm Sara Murray, and this series has been brought to you by The Conference Board.  

Intro: You have been listening to C-Suite Perspectives, a podcast by The Conference Board.