Small business group ISME says business confidence among its member firms is continuing to deteriorate rapidly.
Its quarterly trends survey of more than 500 firms showed that 47% were less optimistic about the future than they were 12 months ago. This compares with 38% in the previous quarter.
ISME says the downturn in confidence can be directly linked to a 'significant reduction' in orders in the last three months.
The manufacturing sector was particularly pessimistic, with those who were less optimistic outnumbering those were more optimistic by a margin of 53 percentage points.
The survey found no net increase in employment in the sector in the past 12 months, with 24% of companies employing more people, but the same percentage employing fewer staff. The construction sector was worst hit, with only services showing a net rise in employment.
48% of companies expect an increase in sales over the next 12 months, but 39% see a reduction. The number of firms reporting a reduction in the value of exports jumped from 14% to 36%.
Economic uncertainty continued to be the biggest immediate concern among ISME companies - cited by 28% - but concern about reduced orders jumped to second place with 17%. This compares with only 6% in the previous quarter.
Referring to forthcoming talks on a new national pay deal, ISME's head of research Jim Curran said it was essential that firms were not hampered by 'unrealistic' wage demands.
