ANZ's chief economist says last month's devastating Christchurch earthquake will only exaggerate the consumer caution that has been evident for some time.
The monthly ANZ-Roy Morgan consumer confidence index fell 7 points to a two year low of 101.4 in March.
A reading above 100 shows optimism.
However, ANZ chief economist Cameron Bagrie says things could have been a lot worse.
He says consumer confidence was already pretty low in February, providing a low base to start from.
Mr Bagrie says given the scale of the challenges that Canterbury is facing, the fact confidence there fell only 16 points suggests the economy may have got off lightly.