Business confidence has fallen for the sixth month in a row and farmer confidence has been hit by slumping dairy prices.
The ANZ business outlook shows a net 24 per cent of firms are optimistic about the general outlook, down 16 points in a month.
The level is down 46 points from the peak in February.
ANZ said the economy was clearly past its peak growth rate, but the latest confidence levels were still respectable.
"But there is now a clear reality check," it said.
Firms' activity expectations dropped 8 points to +37 and were down in all sub-sectors.
"The overall level remains buoyant but is getting within spitting distance of average," ANZ said.
The economy had moved from recovery with strong growth rates off lows into "Goldilocks mode" of solid growth with low inflation, which was the optimal mix.
"It looks like we'll stop short of overheating, which is when the brakes in the form of tight monetary policy [high interest rates] really have to be applied," ANZ said.
"Just how long Goldilocks eats our porridge and sleeps in our bed remains the critical question. Time will tell."