Business confidence in the British economy has fallen to the lowest level since the EU referendum, according to a survey of company directors.

Business leaders in all parts of the UK are gloomy about 2019, said the Institute of Directors, with Scotland and London – areas where voters were heavily in favour of remaining in the EU – most pessimistic.

About 57% of more than 700 company directors surveyed expected things to get worse, compared with less than 20% predicting improvement – the worse net score since the IoD started its confidence survey in 2016.

Leaders of large firms were most likely to anticipate a downturn. The top concern for directors remains the UK’s general economic condition, followed by the uncertain future trading relationship with the EU and a shortage of skilled workers to fill jobs.

However, they were relatively upbeat about their own firm’s prospects, with a net majority of 30% expressing optimism.

Tej Parikh, a senior economist at the IoD, said: “Business leaders are looking ahead to the new year with trepidation about the economy. While we saw cautious optimism emerging when the Brexit talks appeared to be moving towards a transition period after March 2019, that has utterly dissipated now.

“There can be no doubt that the tumultuous Brexit process is having a damaging impact on firms’ outlooks. The prospect of a no-deal in the near future will be weighing heavily on directors’ minds.”

The IoD – which has about 30,000 members in the business, public and voluntary sectors – has polled members since July 2016, a month after Britain voted to leave the EU.

UK economic growth has been under pressure since a strong performance this summer, with the Bank of England expecting a 0.2% increase in GDP for the final three months of 2018 and forecasting a similar rate for the first quarter of 2019.