CEOs of small and medium-sized businesses are feeling more confident about the economy and their companies, according to the third quarter 2016 Vistage CEO Confidence Index Survey.

The index ticked up in the third quarter to 91.4 following six consecutive quarterly declines, the San Diego-based company said.

However, while confidence is up compared to the previous quarter, during which the index hit a three-year low of 88, the index remained below the 96.3 recorded in the 2015 third quarter survey.

“Uncertainty about future economic policies has made firms more cautious about investment expenditures, although they have not hesitated to add employees to take advantage of relatively strong consumer spending,” said Richard Curtin, an economist at the University of Michigan who analyzes the survey results each quarter.

Fifty-four percent of CEOs plan to hire more employees in the next year; the same percentage expect increased profits. A total of 69 percent expect increased revenues, Vistage said.

However, the number of CEOs who plan to increase investment expenditures in the next year was the fewest in more than three years, at 39 percent, Vistage said.

According to Vistage, one-third of CEOs said their most significant challenge -- mentioned twice as frequently as any other issue -- was finding, hiring and training employees.

“Current hiring plans will continue to put upward pressure on wages and benefits,” Curtin said. “Since CEOs anticipate only a modest pace of economic growth in the year ahead, they are more determined to manage costs as well as to retain and expand their customer base in the future.”

One-fourth of CEOs thought the economy had improved during the past year, down from the 10-year peak of 63 percent recorded at the end of 2014, Vistage said.

Of new overtime pay rules taking effect in December, 47 percent of CEOs said the regulations will impact employees’ pay structures.

The latest edition of Vistage’s quarterly survey includes responses from 1,356 U.S. CEOs, surveyed between Sept. 12 and Sept. 21.

San Diego-based Vistage Worldwide assembles and facilitates private advisory boards for CEOs, senior executives and business owners.