Business confidence in the Bay has ''slipped'' according to a new report but leaders say the region will fare better than others despite the ''severe recession''.
The Westpac Regional Economic Confidence quarterly survey said confidence had dipped by 2 per cent on the previous quarter and there was weakening optimism in the region, which reflected the impact of Covid-19.
Now only 3 per cent of households expected economic conditions to improve over the coming year.
Hardest hit were key industries including forestry, ex-food manufacturing, construction, hospitality, and non-essential retail.
However, the performance of the kiwifruit industry, which got off to a flying start with growers posting a record harvest, ''is likely to have buoyed spirits''.
Westpac industry economist Paul Clark said the country was going into a ''severe recession'' and Tauranga was likely to perform better than Rotorua which had a bigger reliance on tourism.
But the Bay of Plenty was in good stead compared to places like Otago which also relied heavily on foreign tourists although the recovery would be slow.
Tauranga mayor Tenby Powell said the drop in confidence was expected particularly across sectors including tourism, retail, hospitality and construction.
But all of that had been offset by a bumper kiwifruit season and he commended the industry and the Port of Tauranga for managing that growth under the circumstances.
"It has been a great success story in the midst of Covid-19."
'Exciting times': Tauranga investor confidence tops NZ
Regional economic confidence in Bay set to continue to climb
But Powell said the region now needed the green light from Government on "shovel-ready" infrastructure projects to help stimulate the economy.
Priority One chief executive Nigel Tutt said the survey, and most of the economic indicators looked at, showed people in the Bay were feeling better than expected.
"We would expect confidence to drop significantly following lockdown and with an uncertain future ahead but what we're seeing hasn't been too bad."
Tutt said that confidence stemmed from the Western Bay largely dodging the "really bad effects" of the Covid-19 downturn so far, particularly compared to other parts of the country.
"While we know there will be difficult times over the next few months, we can take some heart that we're in reasonable shape as a region at this stage."
Tauranga Chamber of Commerce chief executive Matt Cowley said many were pleasantly surprised with the level of consumer spending after lockdown.
"Many bar owners said they have been busy during level 1 as people want to reconnect after lockdown. Local shopping destinations have also been busy."
However, Cowley said businesses in the professional services sector which continued working remotely during lockdown have had mixed experiences.
"Some service businesses have been inundated with inquiries, while other service business have had a number of clients stop work."
Cowley said it was fair to say business and consumer confidence will fluctuate while the border remained closed and there was a risk of another spike of infections forcing New Zealand going back up the alert levels.
Hospitality New Zealand regional manager for the Bay of Plenty, Alan Sciascia, said hospitality was an essential part of Bay business and will be "critical to our recovery".
Sciascia said pre Covid-19 it accounted for more than $600 million in annual revenue and provided employment for more than 7000 full and part-time workers.
"An estimated $200m was earned by Bay hospitality workers annually and these workers all rely on a buoyant hospitality sector for continuing employment.
"After a long period of closure during lockdown combined with the loss of international tourism, the sector is now dependent on domestic tourism for survival until such time as the international tourists are able to return."
Retail NZ chief executive Greg Harford said it was no surprise there had been a drop in confidence and optimism in the Bay.
"The region has been hit hard by the economic impacts of Covid-19, particularly from a downturn in visitor numbers that is significantly impacting retail and hospitality businesses."
Harford encouraged people to shop local because supporting local businesses would help keep people in jobs.
"Local customers are increasingly value-driven, and looking to spend less overall. This will flow through and make it harder for already struggling retail and hospitality outlets."
Meanwhile, Zespri's total operating revenue for the 2019/20 season was $3.36 billion, up from $3.14 billion.
Chief executive Dan Mathieson said it was an incredibly encouraging year, with the industry working hard to manage quality and deliver more than 5 billion pieces of kiwifruit to people worldwide.
Mathieson said the Bay was now home to an increasingly large and diverse range of organisations and businesses which take great pride in their products and ambitions to grow their businesses and the contributions they make to the local economy.
"It's important that we all continue to work together to produce high-quality goods and services that are in demand in New Zealand and around the world, as well as supporting our local communities."
New Zealand Kiwifruit Growers Inc chief executive Nikki Johnson said it estimated about $1.45 billion was pumped back into the Bay of Plenty economy this season.
The industry had also provided thousands of seasonal jobs during the harvest including Kiwis displaced from work due to Covid-19.
The pandemic was a huge challenge but "this season will certainly be one of the largest for fruit volume harvested''.
But the full outcome would not be known until the fruit has been sold in market, she said.
***The survey was conducted over June 1 to 10, 2020, with a total sample size of 1556.***