The ANZ Business Outlook, released yesterday, had a net 29% of businesses pessimistic about the general economy, the fifth consecutive monthly decline.
For the second consecutive month, general business sentiment was in negative territory across all five sub sectors, ANZ chief economist Cameron Bagrie said.
Agriculture was by far the most pessimistic, while construction and services were the least downbeat.
''Confidence may not be the economic engine that drives growth; ultimately incomes do. But it's critical for keeping the economic wheels turning.
''Lacking confidence, firms don't invest, or take a punt on that new employee. Activity can grind to a halt and that's a growing risk.''
It was not just confidence in the general economic situation that had fallen. Businesses also noted expectations for activity in their own firms had fallen again - also down to a multi year low.
That tended to be a leading indicator for GDP growth, and reinforced expectations for a significant weakening in GDP growth over the coming year.
The ANZ composite growth indicator fell to 12, the lowest in close to three years and now sat well below historical averages. The economy on the whole was still moving, albeit in fits and starts, with a slower pace overall, Mr Bagrie said.
Pricing intentions fell six points to 16, the lowest since December 2012.
Agriculture remained out for the count with very few surprises there. A sub $4 per kilogram of milksolids milk price in the coming season meant a loss for most, he said.
Cash flow pressures were intense and rural regions would feel the initial squeeze.
''We're already seeing rural aligned regions stall in the growth stakes.''
Prospects for the construction sector had weakened significantly over the last few months, although our own activity expectations moved back into positive territory this month.''
Readings for the services sector, while not as upbeat as previous months, remained reasonable.
''Here's hoping it's the old `rope a dope' and the economy comes out fighting in the next round.''
The New Zealand dollar was moving down in value and the official cash rate was headed lower, dairy prices had started to recover although they remained at low levels. Lower petrol prices had boosted discretionary incomes, Mr Bagrie said.
However, there were some real reasons for businesses to be cautious. International commodity prices were sitting at a 13 year low and China's equity market volatility was surreal.
Domestically, there had been a nasty combination of a hit to dairy incomes, receding impetus from Christchurch construction and questions about the sustainability of the Auckland property market.
At a glance
• Business confidence slipped further into the red, led by agriculture
• Five months of falls means confidence as low as it was in the global financial crisis
• General business confidence negative in all five sub sectors
• The collection portrays a very sluggish economy
