No business owner would plan to sabotage business by inspiring fear with employees. Not intentionally, at least. But often, due to the financial stress of months where business is slow, owners and managers pass on information that de-motivates employees at a time when you most need their best effort. Although it may seem normal to complain about typical business problems, it can have an adverse effect on employees who may take it personally.
Fear is not a good motivator. Scared employees work less effectively. Fear has a very short shelf life, and can lead to resentment and resistance. Fear impedes real thinking, innovation, challenge, and risk taking. Replaced with avoiding responsibility, CYA, and doing the minimal amount.
Instead, talk about what’s working and what you would like to see more of. Acknowledge each person for their best efforts and you will get more of that.