A survey out today focused on small and medium sized business shows a sharp slump in both general confidence and - more worryingly - revenue, with petrol costs standing out as the biggest concern.
The MYOB Business Monitor Snapshot, which polls 412 small and medium sized business operators, found 53 per cent now expect New Zealand's economy to decline over the next 12 months.
That compares to 41 per cent in the March survey and just 23 per cent in the survey taken just prior to the election last year.
Actual revenue performance has also declined sharply with the survey showing 26 per cent of business operators had seen their own revenue fall in the past 12 months, and just 23 per cent had seen it rise.
That compares with 18 per cent reporting lower revenue and 37 per cent reporting higher revenue in the September 2017 survey.
It is the first time actual revenue has been in net negative territory since 2011.
MYOB general manager Carolyn Luey said that while this was concerning, business operators were not panicking.
"New Zealand's economy continues to tick along and while more businesses are seeing their revenue fall, it is worth remembering that this comes against a background of a sustained period of growth," she said.
But businesses were now clearly factoring tougher conditions and a tightening of their own finances, she said.
"This will have a flow-on effect throughout the economy, from hiring to investment, to payment and purchase arrangements with fellow businesses."
Concern about Government policy still features - as it has with other confidence surveys this year.
Given the heated political debate around business confidence, MYOB asked respondents why they thought business confidence was so low.
Some 49 per cent of business operators blamed the coalition Government for the slump in confidence.
"Kiwi businesses, particularly those on the smaller end of the scale, rely on a clear understanding of the impacts of government policy to make important investment decisions," Luey said.
"Policy changes and uncertainty around things like tax, regulations, government spending and employment law only puts more pressure on business owners who are becoming increasingly cautious about investing and under greater financial pressure."
Tax was the big driver of low confidence with 61 per cent of respondents citing it as a cause.
Forty-five per cent also cited minimum wage increases.
Of those respondents who cited external factors as reasons for low confidence, 72 per cent highlighted rising fuel costs.
On regional basis 90 per cent of Wellington based businesses saw fuel as a major concern, compared to just 65 per cent of Auckland businesses.
The regional breakdown also showed revenue falling in both Auckland and Christchurch with about one third of operators reporting revenue falls in the past 12 months. That compared to 19 per cent of Auckland operators who reported gains and just 15 per cent of Christchurch operators.
Wellington bucked the trend with those reporting revenue gains at 25 per cent, compared to 17 per cent who had experienced declines.
The same trend was evident in the revenue outlook for the major cities with Wellington the only main centre where more businesses expected revenue to improve than to decline.