The confidence index from accountants BDO dropped to a score of 61.8 this month from 64.3 six months ago.
With the exception of January this year, the confidence of small and medium-sized quoted companies is at its lowest for over two years.
Despite the drop, the index remains above the 50 neutral mark. The fall mirrors a decline in expectations of revenue growth for the year ahead – turnover is expected to rise 13.4 per cent, the lowest rate of expected growth since July 2013.
Survey figures released today by insurance firm Zurich showed half of small firms were concerned about red tape.
Also high up on their list of worries were VAT limits and late payments from firms they supply.