Business confidence has slumped due to Europe's debt crisis.
The latest BNZ survey found a net 2% of respondents now expect the economy to be worse in a year's time, a turnaround from last month when 7% expected conditions to improve.
The last time firms were so pessimistic was in March, after the February earthquake in Christchurch.
BNZ chief economist Tony Alexander says the economy is not as robust as firms had hoped.
"People are clearly responding to the bad news that they are hearing overseas with regard to Europe in particular and some worries about Chinese inflation permeating the news as well."
Mr Alexander says comments people have made in the survey about their individual businesses and industries make it clear that the Rugby World Cup interrupted things "quite a bit."
He says a few businesses were disappointed by the level of sales they had during that period and some are reporting that people have kept their wallets closed since the tournament ended.
Mr Alexander says the general air of cautiousness worldwide also means the New Zealand retail sector is unlikely to see big spending at Christmas.
He says people are still experiencing generally tight economic conditions at the moment and while no individual sectors stand out as being extremely positive, feedback remains largely good in agriculture.
"The growing conditions by and large have been good, so there's still definitely some positive comment coming through there."
But he says the construction sector is exceedingly mixed with very positive as well as extremely negative comments "and of course still that uncertainty about the rebuilding of Christchurch".
In real estate, both buyers and vendors are still very tentative, he says.
Mr Alexander says many companies both here and overseas are adopting a "wait and see" approach.