At the same time, 61% of firms said current restrictions had caused their turnovers to fall with just 14% expected trading levels to return to pre-pandemic levels in the next 12 months.
When it comes to jobs, a net balance of 10% of businesses in the region expect to reduce staff levels over the next year, up 10 points on last month.
Their economic optimism fell dramatically by 34% to stand at -10%. Overall business confidence dipped three points to -7% as the third lockdown came into force.
The biggest falls were reported in Scotland (-32% vs -9% in December), Wales (-20% vs -1% in December) and the South West (-8% vs 5% in December). But firms reported a month-on-month increase in confidence in London (up 5% to 3%), the South East (up 7% to -4%) and North West (up 8% to -5%). Yorkshire business confidence remained steady month-on-month at -4%.