Business confidence has stalled again despite the regional economy booming, the latest ANZ Business Outlook survey has found.
The results of the survey, published on Thursday, show 31 percent of respondents reported they expect general business conditions to deteriorate in the year ahead.
"Leading indicators such as business surveys and light traffic flows are suggesting that the New Zealand economy is running out of steam," ANZ chief economist, Sharon Zollner, said.
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While third-quarter gross domestic product (GDP) growth did disappoint at just 0.3 percent quarter-on-quarter, she said it's "too soon to conclude that it is anything more than a pothole".
The findings come despite the regional economy booming, Ms Zollner said, which suggested there "does seem to be a degree of wariness amongst firms".
"Increasing evidence of a global slowdown is likely playing a part, as well as the uncomfortable combination of elevated costs but limited ability to pass these costs on, which is impacting firms' profitability."
Prime Minister Jacinda Ardern warned of international slowdown in her speech on the economy earlier this month.
"We have strong fundamentals and are well prepared, but we need to be realistic that if the global economy slows, it will affect our economic growth," she said.
Trade tensions in the wake of tariffs imposed by the United Sates on Chinese imports put pressure on the economy last year. New Zealand's souring relations with China could also impact business confidence, as well as uncertainty around Brexit.
Business confidence appeared to be bouncing back in January after a turbulent 2018. Westpac chief economist Dominick Stephens told Newshub at the time: "We've got a range of factors that are boosting the economy."
He said factors such as good agricultural growing conditions, and the Government pumping money into low- and medium-income households via its families package, would help businesses feel more confident.
"We've got unemployment dropping away, and I think businesses are starting to feel this and starting to realise that while the economy's slower than it was, it's not all doom and gloom."
ANZ's December 2018 survey of small firms also found that business confidence had lifted among firms, with 36 percent of small businesses pessimistic about general business conditions, down from 44 percent.
But business confidence in the early part of last year was bleak, declining to its lowest point since March 2011. The New Zealand Institute of Economic Research (NZIER) quarterly survey of business opinion for June reflected uncertainty since Labour was elected in 2017.
The next NZIER quarterly survey will be released in April, which could confirm the drop in business confidence reported in ANZ's latest survey, or have a completely different outcome.
In response to the ANZ report, ABS Bank said on Thursday it will "keenly await this release in early April to see if it confirms the weakness in the monthly ANZ survey".
It said it expected GDP growth would pick up from early 2019, "but the February business confidence survey casts some doubt on our forecast".
ANZ appeared to be confident in its results, with Ms Zollner saying: "Clearly the economy is stretched at the moment, but it does appear that momentum has waned markedly over the last six months."
The report found that the agriculture and services sectors are the most optimistic in New Zealand, while construction was the least. The Bay of Plenty was the most upbeat about future activity in construction, whereas Auckland waned.
Last year the Treasury expressed concern about the continued flailing in business confidence: "A key risk to growth in 2019 is the extent to which weaker confidence affects business investment and household spending decisions."
Finance Minister Grant Robertson was not available for comment.