Small businesses remain pessimistic about trading conditions, with concerns about the Chinese and European economies and the high Australian dollar hurting confidence.
The BankWest Business Challenges Survey found 72.7 per cent of small and medium-sized enterprises (SME's) believed they faced more challenges compared to a year ago.
BankWest business chief executive Ian Corfield said that was an improvement compared to last year when 80.1 per cent believed conditions were more challenging compared with 2010.
"A big chunk of SME's think that conditions will be tougher over the next year compared to the last year, but what has changed since last year is that the proportion who think that has declined quite significantly," he told AAP.
"I guess what that is telling us is that there is some optimism creeping back in."
Mr Corfield said the survey showed the biggest concern for small business was the general economic environment, particularly China and Europe, and the high value of the Australian dollar.
He said attracting and maintaining customers and the high cost of utility prices were also major concerns.
The survey showed that 39.1 per cent of businesses felt growth opportunities in their sector were improving, up from 35.2 per cent last year.
Mr Corfield said one of the key drivers for growth was technological changes.
"A third of small businesses say that changes in technology are a key driver in business growth for them," he said."Quite often we talk about the impact of online sales on retailers but we ignore the general beneficial effects to a lot of other businesses across the economy."
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