Ongoing concerns about the fragile economic situation in parts of Europe are causing New Zealanders to doubt the economic recovery.
The results of the latest BNZ Business Confidence survey shows five per cent of respondents expected the economy to be worse a year from now, reflecting a changing attitude as Greece's election date nears and fears grow about Spain spiralling into a similar debt crisis.
Last month nearly a quarter of all respondents expected the economy would be in better shape next year, down from 34 per cent two months ago.
"The result suggests yet again that the NZ economy has yet to gain sustained firm upward momentum after exiting the global recession in the first half of 2009," BNZ chief economist Tony Alexander said in the report.
"However the level of sentiment is at the bottom of the range of the past three years rather than unusually low therefore it is suggestive of about 1.5 per cent growth continuing in the near future."
This was in line with National Bank's most recent business confidence survey, which reported the first decline in optimism in seven months, citing concern about the global economy.
According to BNZ's respondents the manufacturing, retail and tourism industries reported business was tough. In the agriculture and agricultural servicing, farmers appeared to be restrained in their spending with an uncertain outlook for lamb and wool but expectations beef would improve.
The information technology and telecommunications sector reported business was strong while the insurance industry was reportedly busy with rising premiums. Property managers were seeing strong demand, with rents rising.
The construction industry reported higher levels of buyer enquiry and repair work in Christchurch keeping builders busy, although sales were tough for construction materials suppliers.
Residential property appeared to be a mixed bag, with sales stagnant according to Wellington real estate agents but Auckland city fringe suburbs were being kept busy.
- © Fairfax NZ News