The Sensis Business Index, which surveys 1000 Australian small and medium businesses, shows that, nationally, 87% of businesses think the economy is either slowing (35%) or static (52%), while 13% are expecting growth.

South Australia registered the lowest confidence level of the states and remains behind the national average.

The March quarter result represents a turnaround from the previous survey, in which South Australian businesses had reported a boost in confidence.

However, confidence plummeted 11 points in the three months to March, with concern about sales and profitability leading the fall.

The South Australian Government is the most unpopular state government in Australia among those surveyed.

“The SA Government (-22 net) remains easily the most negatively perceived of all state and territory governments by SMBs,” the survey found.

“Excessive bureaucracy and red tape are the biggest criticisms, while employment training schemes and offering incentives, subsidies and grants are generating some positive opinions.”

Despite all that, Sensis said expectations in South Australia remained “relatively upbeat”.

Nationally, the confidence score was the lowest in 12 months.

Sensis CEO John Allan said the projections for the economy in a year’s time had deteriorated, moving from positive to negative territory.

Nevertheless, SMEs were feeling more positive about the Federal Government than they were 12 months ago.

“The Government’s rating is currently 14 points better off than it was at this time last year, placing it in a good position with small and medium businesses as we possibly head to an early election,” Allan said.

“The halo effect of the new Prime Minister seen last survey appears to have now evaporated however. In the December survey eight percent of SMBs spontaneously mentioned the new Prime Minister as having a positive impact on their perceptions, but that figure is now less than one per cent.”