After recovering in the first half of 2010, the economy is showing further signs of regressing, according to the National Bank.
Its August business confidence survey showed a net 16 per cent of respondents still expected general business conditions to improve in 12 months' time, but this was down 12 points
on last month.
"The good news is that confidence is still in positive territory. The bad news is that confidence is down 34 points from the peak reached in February," National Bank chief economist Cameron Bagrie said.
"We've referred to the last few months as seeing momentum wane from a gallop to a canter to a trot.
"The risk is building that we take a further step down to a mere walk."
Firms' own activity expectations also continued to soften, albeit from healthy levels. A net 26 per cent of businesses in August expected better times for their own business over the year ahead, down 6 points from July.
All surveyed measures softened in August. Profit expectations were down 5 points. A net 4 per cent expected to be making more money over the year ahead, compared to a long-run average of 7.
A net 4 per cent expected to be hiring staff over the year ahead, below its long-run average of 6, and down 4 points on July. A net 3 per cent of firms expected to be investing more in the coming year, down 2 points from July and compared to a long-run average of plus 12.
Export intentions bucked the easing trend. A net 31 per cent of businesses expected to be exporting more over the year ahead.
A net 32 per cent of businesses expected to be raising prices over the year ahead.
