A new study from the Institute of Directors (IoD) suggests business leaders are bracing themselves for an extended period of recession.
In a study of 1,277 members of the organisation, 52 per cent of respondents said they expected growth in 2012 to be lower than last year.
Some 28 per cent said they foresee flat levels of growth, while 28 per cent predicted an upturn in economic fortunes.
Just 35 per cent of interviewees thought the economy would emerge from recession during the remainder of 2012, and just seven per cent believed this was highly probable.
Almost half (44 per cent) said they had postponed at least one investment or employment decision in 2012 to account for the current economic uncertainties.
Of those who held back, 76 per cent delayed decisions on business investment and 65 per cent held off deciding on matters of employment.
Some 40 per cent of the postponed business investment decisions have either been taken or will be by the end of 2012, while 58 per cent will be delayed until at least 2013.
Similarly, 46 per cent of the delayed employment decisions are either now underway or will be resolved by the end of the year, while 51 per cent will not be dealt with until 2013 at the earliest.
Graeme Leach, chief economist at the IoD, said businesses are "battening down the hatches" in the expectation that the recession will continue for the rest of the year.
"That is bad news for the economy at large, because decisions to invest money or take on more staff are being postponed until things look up," he stated.
"Low confidence leads to delayed decisions, and delayed decisions further undermine economic confidence - it’s a vicious cycle."
Mr Leach said the government’s reform agenda is pointing in broadly the right direction, but IoD members believe they are doing too little, too slowly.
"If the coalition wants to break this cycle of low economic confidence, they need to take some bold steps that will make a real difference to the cost and complexity of doing business in the UK," he added.
Posted by Dan Smith