Business confidence has fallen to its lowest point in over a decade, according to the latest ICAEW Business Confidence Monitor.
The ICAEW's index is registering a negative rating of -20.6 in the final quarter of 2019, down from -10.3 in the previous quarter. The last time the index dropped this low was the third quarter of 2008 in the wake of the financial crisis.
Brexit continues to be the major factor in the negative outlook, although political instability and global factors, such as the trade war between the US and China are also dragging on confidence.
The ICAEW says the UK's upcoming General Election will present an opportunity for a new government to explain how it will tackle the challenges that businesses are facing.
Commenting on the election, ICAEW chief executive Michael Izza, said: 'We want to see policies to harness the technological innovation that will drive national productivity, public finances that can deliver the infrastructure needed to support a modern economy, and the UK leading the way towards a zero-carbon future.'
According to the ICAEW, over half of companies are operating below capacity, compared to just 5% that are running above capacity. Consequently, businesses remain reluctant to invest and capital expenditure was up by just 1.9% over the past 12 months.
The general unwillingness to invest has also impacted on employment where growth is subdued.
Company profits are another area where businesses anticipate slow growth on the back of modest sales, a profit margin squeeze and stalling productivity.