The severe winter contributed to a "hesitant" beginning to 2010 for the economy, the Scottish Chambers of Commerce has said.
A survey found cold weather at the start of the year affected confidence and activity across all sectors.
The main business trends remain negative but are better than a year ago, according to the report.
It concluded signs of a sustained recovery in the Scottish economy "remain elusive".
The report, conducted in conjunction with the University of Strathclyde's Fraser of Allander Institute, found rising optimism in manufacturing during the first quarter of 2010.
 |  Of particular concern is the apparent fall in the volume of public sector contracts  Garry Clark Scottish Chambers of Commerce |
Rising export trends led to an improvement in total orders, but the survey found demand in Scotland and the rest of the UK remained weak.
Recruitment in manufacturing was at a lower level than at the end of 2009, with only 26% of firms attempting to hire staff.
The cold weather, together with uncertainty over the forthcoming election, weakened confidence in other sectors.
Demand in tourism declined markedly during the three months to the end of March.
Average occupancy rates for visitor accommodation fell from 62% to 47%, the lowest level for a decade.
Almost half of construction firms reduced total employment levels and none reported an increase in employment.
More than half of retailers reported and expected declining sales in the six months of 2010.
'Crucial time'
Garry Clark, head of policy at Scottish Chambers of Commerce, said the cold weather and snow had led to a fall in demand and increased bills for businesses.
He said: "This is a crucial time for the Scottish economy.
"The emerging positive outlook in Scottish business for the second half of 2009 has given way to a more cautious optimism in the early months of this year.
"Construction remains in difficulties, and of particular concern is the apparent fall in the volume of public sector contracts."
He said the forthcoming election would remove some of the current uncertainties over the future direction of government policy.
"It will also provide an opportunity to cement a 'good government' approach to the economy at the heart of national policy," Mr Clark added.
A spokesman for the Scottish government said Scotland continued to have lower unemployment and higher employment than the UK as a whole.
He said: "The latest figures show that output in the construction sector has fallen by more in the UK as a whole than it has in Scotland, and construction employment in Scotland is also holding up better than elsewhere in the UK in these tough times."
The spokesman added a "record" £35bn of infrastructure investment is being delivered by the Scottish government in the next decade.
