New Zealand firms gave in to global unease in February, as falling export prices and turmoil in equity markets dampened confidence, with interest rate and inflation expectations down.

A net 7.1 percent of firms were optimistic about the general economic outlook over the coming year, deteriorating from a net 23 percent in January, according to the ANZ Business Outlook. A net 25.5 percent of companies see their own activity expanding, down from 34.4 percent a month earlier, and a net 12 percent see profits growing, compared to a net 17.7 percent expecting growth in January.

"Firms are still flagging reasonable prospects; it's just that the foot is planted less firmly on the accelerator," ANZ Bank New Zealand chief economist Cameron Bagrie said in his report. "Our composite indicator still flags pretty solid prospects over the year ahead, albeit in a lower gear."

The dairy sector is the back marker. In fact, falling export prices, a stubborn NZ dollar and rising local funding costs have already delivered a meaningful tightening in local financial conditions. That's a real concern.

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Interest rates are expected to fall by a net 37.3 percent of respondents, from net 32.8 percent in January. Inflation expectations for the coming year slipped to 1.39 percent, from 1.64 percent.

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A net 13.2 percent of respondents see a contraction in livestock investment, compared to a net 11.7 percent a month earlier, while a net 24 percent of firms see commercial construction intentions growing, compared to a net 45.4 percent in January. A net 14.2 percent of firms were positive on the residential construction sector's outlook, down from a net 32 percent a month earlier.

ANZ's Bagrie said the local economy was not immune from global pressures, and would have to navigate "the odd speed bump" in the year ahead.

"The dairy sector is the back marker. In fact, falling export prices, a stubborn NZ dollar and rising local funding costs have already delivered a meaningful tightening in local financial conditions. That's a real concern. Absent a lower OCR there is a real likelihood that local borrowing rates move up! That portends of more modest growth ahead.

It's easier to navigate challenging times when the wheels are turning in the first place.

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"The New Zealand economy still has a lot of torque though. Lagging indicators flag good momentum; the economy was moving up through the gears in late 2015. That's important. It's easier to navigate challenging times when the wheels are turning in the first place," Bagrie said.

Of the 449 respondents, a net 14 percent expect investment to expand, compared to a net 14.9 percent seeing expansion a month earlier, while a net 11.9 percent plan to take on new staff, down from 20.1 percent in January. A net 23.4 percent of firms anticipate exports increasing over the coming year, up from 19.3 percent a month earlier.

A net 6.9 percent of firms see the unemployment rate rising, compared to a net 19 percent in January, and net 21.9 percent see capacity utilisation increasing, compared to 17.7 percent a month earlier.

A net 10.6 percent see it becoming easier to get credit, down from 13.5 percent a month earlier, while a net 17.8 percent of firms expect to raise their prices over the coming year, down from 23.6 percent.