Business confidence slumped going into the Covid-19 lockdown and companies are bracing for things to get worse.
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The Institute of Economic Research's (NZIER) quarterly survey of opinion showed a net 67 percent of business leaders think the economy will get worse over the next 12 months - the lowest level in more than a decade.
Firms expectations of their own outlook fell from being mildly positive at the end of last year to 11 percent expecting reduced activity over the next three months.
"Whilst demand in firms remains soft in the March quarter, it was the June quarter where the weakness is most apparent. It is the June quarter where the effect really starts to bite," NZIER's principal economist Christina Leung said.
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The survey was done before the government announced the four week lockdown.
Manufacturers, retailers, and the broad services sector were the most pessimistic.
Leung said sales were expected to fall sharply, as would profits, while firms were already scrapping investment and shedding staff.
"With all this uncertainty, businesses are finding it difficult to plan."
She said the survey was consistent with annual economic growth sliding to below 1 pct to the end of March.
Leung said how low confidence would fall was up to how long the lockdown lasted and the level of uncertainty.
