Westpac chief economist Dominick Stephens said the sharp drop in December in the Bay of Plenty region was, in part, likely to be related to the cooling in the housing market.
"We've also seen a recent softening of the dairy prices as well as growing sense of unease over the possible impact of government policy on the agricultural sector," he said.
Priority One chief executive Nigel Tutt said: "We believe it reflects the post-election confidence drop that is seen right across the country in this survey.
"It's possibly seen more strongly here as the area is more right-leaning," he said,
Tutt said discussions with local businesses showed there was some unease about possible policy changes under the new Labour government.
"But bear in mind that most Bay of Plenty businesses are operating in very favourable conditions at the moment, which we expect to continue," Tutt said.
Tauranga Chamber of Commerce chief executive Stan Gregec said businesses had it "pretty good" for the past few years.
"After several years of clear blue skies, where the economy has been going gangbusters, we've now got a few clouds gathering and the prospect of some bumps in the road ahead.
Gregec said rather than reflecting pessimism the survey result should be read as uncertainty in a "more unsettling and unknown" environment.
"We still believe conditions are generally favourable to business, and also with the wider world economy, there's certainly no reason for panic," he said.
Gregec said the Government's stated intention to cut back immigration numbers and wind back the clock towards collective bargaining were the two biggest concerns.
"These two things will be setting off alarm bells for bigger employers - who are already struggling with the challenges of finding and retaining experienced staff."
Simon Anderson, chief executive of Realty Group, who operates Eves and Bayleys Real Estate, said he was "shocked" and surprised by the survey result.
"It's definitely not the result I was expecting. From a real estate perspective, the housing market may have slowed, but we are now back to a normalised market in terms of transactions," he said.
Anderson said the type of buyers had changed in Tauranga, but there was still a lot of first-home buyer activity.
The commercial construction sector in Tauranga was extremely buoyant, and there were
definite signs of continued growth, he said.
NZ Kiwifruit Growers chief executive officer Nikki Johnson said despite the survey results, the growth of the kiwifruit industry was predicted to double to $4.5bn by 2025.
"The future of the industry and its contribution to the local economy looks very positive."
Kiwifruit profitability can experience large fluctuations due to factors like the weather, but the industry was focused on mitigating risks to maximise growth potential," Johnson said.
December quarter Regional Economic Confidence - Top 5 regions:
Otago: 52%
Wellington 35%
Nelson/Marlborough/West Coast 33%
Gisborne/Hawkes Bay; 27%
Canterbury 19%
Source: Westpac-McDermott Miller Regional Economic Confidence Survey
