Overall business confidence has plunged by nine points in a month to minus 9%, according to the latest Bank of Scotland Business Barometer.
In the survey for August, companies in Scotland reported lower confidence in their own prospects, which fell six points to a net balance of zero.
The overall measure of minus 9% takes their view of the wider economy into account.
Businesses’ hiring intentions showed a net balance of 15% of businesses in Scotland expect to reduce staffing levels during the next year, up 12 points on last month.
A net balance of 38% of businesses in Scotland said the UK’s exit from the EU was having a negative impact on their expectations for business activity, up 13 points on a month ago.
Confidence across the UK fell to 1%, as businesses became more less optimistic about the econom, while confidence in their own prospects fell to 8%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Fraser Sime, regional director for Scotland at Bank of Scotland Commercial Banking, said: “It’s evident that UK and international uncertainties are effecting the confidence levels of businesses in Scotland.
“We remain committed to helping businesses access the opportunities that continue to present themselves across all sectors .”
Across UK-wide, business confidence in the construction sector rose by six points to 12% but confidence fell by 16 points to 3% in the manufacturing sector, and by 11 points to 6% in retail, the lowest this year.
Confidence was also down 15 points to minus 3% in the services sector, bringing it near to the February low of minus 4%.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “We have seen a dip in overall business confidence this month, with firms appearing less positive about their own trading prospects and the broader economy, and remaining low against the historic average.
“While ongoing economic uncertainty is likely a key driver, it’s worth noting that companies’ assessment of the expected impact on their business of the UK leaving the EU has remained broadly unchanged this year.”
