Overall business optimism among British Columbia's small business owners dropped slightly in July, according to the Canadian Federation of Independent Business.
The drop followed substantial improvements in business optimism in May and June.
B.C., however, was the third most optimistic province in Canada, up from fifth spot last month.
The index continues to remain well below historical norms, according to the CFIB. It suggests that GDP growth has not yet entered positive territory.
In B.C., 46% of businesses say the overall state of business is satisfactory, while 33% say it is good.
The province's leading indicators - unfilled customer orders and staff overtime hours - remain mostly at normal and below normal levels.
Insufficient domestic demand is the greatest business constraint, according to 61% of B.C. businesses.
Tax and regulatory expenses pack the most significant cost pressures in B.C., with 56% of business owners saying such costs are causing difficulties for their business.
The most pessimistic industries in B.C. are natural resources, transportation and agriculture.
Saskatchewan and New Brunswick are the most optimistic provinces in Canada.