Economic confidence in Otago has turned negative for the first time in nearly three years, while public sector cutbacks have made Wellington the second most pessimistic region in the country.
The Westpac McDermott Miller Regional Economic Confidence Survey asks households about their expectations for their local economy over the coming year.
It shows regional confidence falling in most parts of the country in the first quarter of the year.
People in Auckland and Canterbury, and the big dairy exporting regions of Waikato and Southland remain more optimistic than the rest of the country, though confidence has slipped thanks to China's slowing economy and falling commodity prices.
But Westpac's senior economist Felix Delbruck says he is surprised people in Otago have become pessimistic as Dunedin is one of the cities where the housing market is picking up.
However he said Queenstown, part of the region and the centre New Zealand's tourism, would be feeling the effects of the slowing global economy.
Northland is the most pessimistic region, hurt by a weak housing market and high unemployment.
Confidence in Bay of Plenty plunged in the wake of the Rena oil spill, the Psa blight devastating the kiwifruit industry and a slow housing market.