According to new numbers released by the Canadian Federation of Independent Business, small to medium sized Island business owners are the least confident in the country.
Only 52.7 per cent of P.E.I. business owners are confident in their business outlook, according to the federation.
National business confidence dropped to 60.9 per cent in July, a three-year low, but among the eastern provinces the numbers are much lower.
Based on past results, the CFIB says index levels normally range between 65 and 75 when the economy is growing.
Some of the main operating challenges P.E.I. business owners listed in the report include lack of domestic demand for products, shortage of working capital and shortage of skilled labour.
The federation also lists the main cost pressures on business owners, with fuel topping the list, followed by taxes and employee wages.
The federation publishes its business barometer index each month.