The Government may have delivered a business-friendly Budget but the latest survey of confidence shows firms are still feeling gloomy about the prospects for the economy.

Headline business confidence dipped in May, the ANZ Business Outlook Survey found.

"A net 27 per cent of businesses are pessimistic about the year ahead, down 4 points from April."

Firms' views of their own activity (which has a stronger correlation with GDP growth), also dipped from a net 18 per cent positive to just 14 per cent, the lowest reading since November.

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The views of business are increasingly at odds with those of economists who largely see solid growth continuing over the next few years - with just a slight slowing through the rest of this year.

So what's up? Is business still fixating on the election result as if it was the 2007 World Cup quarter final? Or is there something more serious brewing?

Perhaps, if we look at the sectors that are gloomiest, the answer is a mix of both.

Economists tend to focus more closely on firms expectations of their own business outlook.

The fall there is more serious as it can flow through to hiring and investment with a real effect on economic growth

The construction and retail sectors continue to look the most pessimistic about their own outlooks, ANZ chief economist Sharon Zollner notes.

For construction that has a lot to do with capacity constraints making it increasingly difficult to get on with the job.

"Employment intentions in the industry plunged to the lowest since 2009, and investment intentions also dropped markedly," Zollner writes.

While this might reflect some fears about the new Government's stance on immigration it's largely a structural issue and one that has been inherited.

The retail industry is also particularly glum - profit expectations and hiring expectations are down, the survey shows.

Although retail investment intentions have rebounded a bit - something Zollner suggests may be to do with efforts to boost productivity and head off the impact of minimum wages rises.

This touches on the Government's proposed employment law changes - something that is almost certainly hurting business outlook in the retail, manufacturing and the service sector.

Feedback from groups like the Employers and Manufacturer Association (EMA) and Business NZ suggests that despite a broad acceptance that the new Government is not radical, there is genuine concern about the impact of new labour laws.

This is less about rises to the minimum wage and more related to issues like the repeal of the 90-day trial period for businesses with more than 20 staff and changes to collective bargaining rules which will give unions more clout in some workplaces.

In its oral submission to the select committee on the Employment Relations Bill, the EMA argued it represented a return to the "them and us mentality of mid-last century".

"We believe that the Bill in its current wording is adversarial and contrary to the principles of good faith bargaining," the EMA said.

It's not clear how much the Government is prepared to budge on these issues - if at all.

Economists say they have factored lower confidence into their economic forecasts but will keep a close watch for any further falls.

Some say they expect to see an improvement over coming months.

For that to happen we may need to wait for the final details of proposed employment law changes to be settled and implemented - and for business to adjust to the new normal.

Meanwhile, it looks increasingly like the Labour led coalition will struggle to avoid a similar business backlash to the one faced by Helen Clark in her first year as PM - dubbed then as: "the winter of discontent".