Business confidence has fallen sharply, indicating that firms expect the pace of economic growth to slow.
The ANZ's monthly survey found optimists outnumbered pessimists in May, with a net 16 percent of respondents expecting the economy to improve over the year ahead.
That compares with 30 percent in the previous month.
Fewer firms are upbeat about their own prospects, with 33 percent of firms forecasting their own businesses to grow in the next 12 months, compared with 41 percent in the previous month.
Investment and hiring intentions also slipped, as did profit expectations.
ANZ chief economist Cameron Bagrie said economic activity was easing and most indicators were still above their historical average.
Inflation expectations also fell to an historic low at 1.62 percent, compared with 1.76 percent in the previous survey, with fewer firms also expecting to raise prices.
The Reserve Bank's inflation target band is 1 to 3 percent.
Annual inflation is currently 0.1 percent.
