The winter of business discontent continues with another survey showing sentiment slumping to multi-year lows, amid a slowing economy, cooling demand and shrinking profits.
The New Zealand Institute of Economic Research's (NZIER) latest quarterly business survey shows a net 19 percent of firms expect economic conditions to worsen in the coming months, the lowest level in seven years.
The previous survey in April had a 10 percent pessimism level.
"Weak business confidence and deteriorating profitability are making businesses more cautious about planning for the future," NZIER principal economist Christina Leung said.
Respondents were still positive about their own outlook, with a net 13 percent expecting business to be better in the next three months compared to nearly 16 percent in the previous quarter. But even that confidence level was the weakest in five years.
"These developments point to softer economic growth in the second half of 2018," Ms Leung said.
She said the retailers were particularly downbeat as they found their costs rising but were finding it harder to pass that on to consumers through prices. A higher minimum wage and planned changes to industrial relations laws were seen as reasons for the pessimism.
Business sentiment has been in free fall since the election with uncertainty about policies, concerns about higher costs and wages, being blamed.