The Abbott government is losing favour with the business community, with more company directors than not believing the federal Coalition "does not understand business".

A survey of more than 500 company directors by the Australian Institute of Company Directors has found nearly half of the directors surveyed believe the Abbott government's performance in its first year in office has been poor or very poor.

Unpopular with business: Prime Minister Tony Abbott. Credit:Andrew Meares

A majority think the government's performance has negatively affected consumer confidence.

Almost half say the government's poor performance has had a negative impact on their business decision-making.