The economy has returned to positive growth but the recovery remains fragile, according to a "worrying" business survey.
Business so far this year is likely to have been negatively affected by the weather-related disruptions in December, a poll of 6,000 firms by the British Chambers of Commerce (BCC) showed.
But the chambers said that the overall picture was still worrying.
While balances for the manufacturing sector remained positive and exports were still strong, there had been a worsening across all the key balances, pointing to a difficult economic environment in recent months, said the report. The service sector showed mixed results, with improvements "slight and still inadequate".
David Frost, director general of the BCC, said: "The results of the Quarterly Economic Survey show our economy faces a difficult year and that the recovery will be choppy.
"Exporting activity remains strong, but there have been sharp declines in confidence, and cash flow is still a real concern for businesses.
"While the Government has listened to calls to help the private sector create growth, there is more to be done in giving businesses greater confidence, and encouraging them to export, invest and create more jobs.
"As the public sector cuts start to bite, the Government must get the detail right on the measures announced in the Budget to generate economic growth by helping businesses thrive."
Angela Eagle, Labour's shadow chief secretary to the Treasury, said: "Our economy should be growing strongly this year so these are disappointing findings. In the first quarter of this year, the economy should not just be making up all the lost ground from the end of last year but growing strongly on top of that.
"A year ago, before George Osborne ripped up our plan to halve the deficit steadily over four years, the economy was starting to grow strongly and unemployment was falling. Now that the Government is cutting further and faster than any other major economy in the world, growth is forecast to be much lower this year and next year and unemployment higher."