Levels are high by historical standards and many firms still expect their activity to increase during the year.
Business confidence continued to decline last month in ANZ's Business Outlook survey, to its lowest level for a year.
It remains high by historical standards, with a net 43 per cent of respondents expecting the general business situation to improve over the year ahead.
It is down from a net 54 per cent last month and a peak of a net 71 per cent in February.
"Higher interest rates are the No 1 suspect," said ANZ chief economist Cameron Bagrie.
"Dairy and forestry export prices are sharply lower too. The housing market is levelling out.
"The New Zealand dollar continues to defy gravity."
But on the positive side of the scales are surging net migration inflows, export commodity prices which are still high, solid employment growth and the impetus from residential and commercial construction.
"Most survey indicators nudged lower in June but still remain north of average, implying above-trend growth, and in that environment it's a lack of capacity rather than demand that is set to become a key issue for firms."
A net 46 per cent of firms expect their own activity to increase over the year ahead, down 5 points from May to a nine-month low.
"But that is well above the long-run average," Bagrie said.
A net 24 per cent of firms expect to be hiring more staff over the year ahead, down 8 points from the peak in February but 19 points above the 10-year average.
Investment intentions strengthened 3 points to a net 26 per cent, but export intentions slipped 5 points to a net 20 per cent.
A net 25 per cent of firms expect to raise their prices over the year ahead, down 3 points from the May survey.
"And in the hot-spot of construction, a net 54 per cent of firms expect price rises - still high, but down from a peak of 62 per cent in March," Bagrie said. "We'll take a glass-half-full interpretation of elevated but waning confidence. It will help to keep official cash rate rises contained and the economic expansion alive."
Compared with its international peers New Zealand's position looked enviable, he said.
There were palpitations from rising interest rates and a high currency but they were the byproduct of business confidence remaining strong, growth robust, inflation low and unemployment headed down.
"We'll take that any time over the reasons interest rates remain low in other countries."
Lowest for year
• Net 43% expect general business situation to improve over the year ahead, down from a net 54% last month.
• Lowest level of confidence for a year but still high by historical standards.
• Net 46% of firms expect their own activity to increase over the year ahead.
• Net 25% of firms expect to raise their prices over the year ahead.