Trade, Talent and Tech: What’s Testing UK & Ireland SMEs in 2025?

Can SMEs keep growing while economical and geopolitical uncertainty shows no sign of easing? Leaders of UK and Ireland SMEs remain cautiously optimistic.

The latest Vistage Q2 2025 CEO Confidence Index has ticked upward to 89.5, rising from 87.5 in Q1. It’s a small but welcome rebound in sentiment, and a sign that CEOs are starting to steady themselves after a year of persistent headwinds.

Just over half (55%) expect sales revenue to grow in the next 12 months, and 61% now predict increased profits, a jump from just 49% last quarter. 

Meanwhile, 57% plan to grow headcount, and almost a third (31%) intend to boost fixed investments, even as 27% expect to cut back.

Still, after a turbulent beginning to the year, they know they can’t afford to take their foot off the gas just yet. 

Uncertainty remains the backdrop to every decision. Nearly half (48%) of CEOs say economic conditions have worsened in the past year, with 47% expecting things to stay about the same in the months ahead, and 29% bracing for further decline.

It’s a delicate balancing act. But leaders are doubling down on what they can control (their people, their costs, their technology) while staying flexible enough to adapt as new risks and opportunities emerge.

Concerns around international trade and market competitiveness

More than half (51%) of business leaders believe the UK is losing competitiveness compared to EU markets. While only 8% think the UK is becoming a more competitive trade hub.

When it comes to EU expansion, most SMEs are holding back. Just 10% are actively planning to expand into EU markets this year, while nearly 40% are reassessing opportunities but haven’t yet taken action.

Attracting talent also remains a top concern. And the proposed UK-EU youth mobility scheme is unlikely to solve the issue. Nearly half (46%) say it will make little to no difference to their hiring needs, and a tiny 5% believe it will significantly help address talent shortages.

It’s clear that many businesses are choosing to consolidate and strengthen their domestic position before making bigger international commitments.

Burnout and work-life balance are growing issues

The economic and geopolitical pressures are clearly taking their toll.

Nearly one in five CEOs now rate their work-life balance as poor, while 43% experience occasional burnout, with 20% saying it happens frequently.

A worrying 60% also simply aren’t able to fully disconnect when they take time off.

Clearly, leaders are paying a high personal price for steering their organisations through uncertain times. 

This raises big questions about sustainability. How long can CEOs and business owners maintain this pace without more support or healthier boundaries? 

Prioritising wellbeing will be vital if leaders are to remain resilient enough to guide their teams through continued economic challenges.

AI adoption is stalled by skills gaps

While enthusiasm for AI remains high, many SMEs are still struggling to turn that potential into practical business gains.

Common reasons for this are that they lack the technical expertise to implement AI effectively, they don’t yet have a clear strategy for AI adoption, or they face high levels of internal resistance.

It’s clear that, without the right skills and mindset in place, even the best technology can’t deliver results. 

For SMEs to unlock AI’s full potential, they’ll need to invest in training, clearer roadmaps, and cultural change. Otherwise, the AI gap will only widen, leaving businesses more exposed to competitors who move faster to embrace innovation.

What lies ahead for UK and Ireland SME leaders?

SME leaders will need to keep balancing caution with boldness. 

Trade concerns, skills gaps and CEOs wellbeing are pressing issues. But strategic investments in talent, technology and support will help businesses stay resilient.

Download the full Q2 2025 Vistage CEO Confidence Index to see the complete data, trends and insights shaping the outlook for the year ahead.
[Download the report here.]

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