Pessimism continues to grow with only 13% of respondents expecting improved conditions in the year ahead and just 31% of all CEOs feeling economic conditions had recently improved. Just 54% anticipated rising profits and 64% expected increased revenues, down from last quarter's 58% and 70%, and 62% and 78% year-over-year, respectively.

Hiring plans remain consistent with year-over-year data, with 56% of all firms planning to add new employees to their workforce. 70% rated retaining existing talent and 67% prioritized attracting qualified talent as "very important."

"Despite concerns about the economy and slowing business expansion, small and midsize companies still report favorable prospects for their business, with nearly two-thirds — 64% — of CEOs expecting revenue gains and more than half anticipating profits to increase over the next 12 months," said Joe Galvin, Vistage's chief research officer.

Survey highlights include:

• Pessimistic economic prospects

• Less than one-third of all CEOs [31%] reported that economic conditions had recently improved, half of the 64% recorded a year ago.

• Firms have expressed even greater pessimism about the outlook for the economy in the year ahead: Just 13% of CEOs expected improved conditions, unchanged from the prior two quarters and well below last year's 32%.

• While the majority [51%] expected the economy to remain stable, the proportion that actually anticipated a downturn rose to 35% in the latest survey, twice last year's 17% and the highest level since late 2008, when negative prospects for the economy peaked at 60%.

• While most of the Q2 survey data was collected before the threat of Mexican tariffs vanished, tariffs of 25% on nearly half of all imports from China remained in force.

• When directly asked about the expected impact of tariffs on their firms, 40% of all CEOs indicated negative consequences for their own business, compared with just 4% who reported positive impact.

• Revenue and profit outlook

• Increased revenues were expected by 64% of all firms in Q2, down from 70% last quarter and 78% last year, and the lowest percentage in nearly seven years.

• Profit increases were anticipated by 54%, down from last quarter's 58% and last year's 62%, and the lowest since Trump entered office.

• The impact of tariffs on profits may partially erase the benefits of Trump's tax cuts for some firms.

• Hiring and investment plans

• Adding new employees to their total workforce was anticipated by 56% of all firms. Although only marginally below last quarter's 59%, it was the lowest in nearly three years.

• 64% said that they were boosting wages to attract qualified talent.

• The anticipated decline in the pace of hiring will slightly ease these wage pressures.

• Planned increases in expenditures for new fixed investments were anticipated by 40%, barely below last quarter's 41% and only slightly below last year's 48%.

• Importantly, few firms planned cutbacks in investment spending [13%], with most firms keeping the level of investment expenditures largely unchanged [46%].

• These small declines in planned investments and hiring are consistent with an expected slowdown in the pace of economic growth.