Uncertainty about the general election on 20 September has seen business confidence for the next year take a hit.
The Grant Thornton International Business Report says business confidence for the next 12 months has fallen from 88 percent to 70 percent.
This narrows the business confidence gap with Australia, where companies have been buoyed by the first Abbott budget.
Mark Hucklesby from Grant Thornton New Zealand said on Wednesday he has witnessed election year jitters in several boardrooms in the past few weeks and overseas customers are also nervous about the outcome.
Mr Hucklesby said despite the drop, New Zealand is still ranked sixth in the world for business confidence.