Business optimists continue to swamp pessimists, but the overall confidence level plunged 11 points to a net 54 percent in ANZ Bank's latest monthly survey.
The survey, which subtracts pessimists from optimists to arrive at the net result, is down 17 points from its peak in February.
ANZ blames this on rising interest rates, falling dairy prices and a levelling out of the housing market.
However, it said interest rates were still low, dairy prices still at historically high levels and that a cooler housing market was a net positive for the economy.
The bank said migration was surging, employment growth was strong and business conditions remained good.