Firms are becoming increasingly pessimistic about their prospects for the next year as the recession cuts deeper into industry, according to a new report.
A survey of 200 companies by Lloyds TSB showed that a third believed their business activity will decline, while two-fifths predicted stagnation.
The bank said there had been a huge fall in the balance of firms expecting business to increase, down to the lowest level since its study was launched seven years ago.
Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said: "As the economy weakens, it is not surprising that firms are not hopeful about their ability to do business over the coming year."
Businesses based in the Midlands were the most hopeful of an upturn, with a third anticipating better trading conditions before the end of the year.
