A survey of businesses in Guernsey has revealed confidence in the States and the economy is falling.
More than half surveyed by the Chamber of Commerce said they were less hopeful about the economy than a year ago.
The Annual Business Trends Survey said plans to cut corporation tax had led to a drop in confidence, as had changes to the workings of the government.
It also found that housing laws were the most commonly cited obstacle to business growth.
The survey revealed 59% of respondents were less optimistic about the island's economic prospects.
In 2004, major changes were made to the machinery of government when it moved to a ministerial system.
Last year, about 39% were positive about the governmental changes and just 9% negative, with the rest having no strong feelings either way.
But now only 28% are positive about the reforms, and 20% are unhappy.
But chamber president Mark Trenchard said despite the findings he was hopeful for the future.
The island's government is preparing to abolish corporation tax in 2008 in a bid to keep its financial industry internationally competitive.