The ANZ-National Bank business outlook reported that business confidence stabilised this month, with a net 43% of respondents expecting general business conditions to deteriorate in the coming year.
That was broadly the same as last month.
"Our initial reaction was to look on the bright side. Anything that doesn't move down in the current environment has to be good news," ANZ-National Bank chief economist Cameron Bagrie said.
"Given the economic landscape of falling equity markets and asset prices in general, regular mention of the dreaded 'R' word and Chicken Little's perennial fear, it could have been much worse."
Facing a barrage of bad news, the obvious danger was that fear became self-fulfilling. Bad news fed on itself, he said. The collective message from the survey remained poor.
Firms' own activity expectations fell another 3%. A net 14% expected worse times in the year ahead for their own businesses. The only time that reading had been worse was in April 1988.
Employment intentions matched last month's record low of a net 21% expecting fewer staff in the year ahead.
The negative streak in employment intentions now spanned 10 months, Mr Bagrie said.
"Brace yourself for a sharp rise in the unemployment rate."
Firms' profit expectations also hit an historical low with a net 39% expecting lower profits in the coming 12 months.
Investment intentions nudged back slightly, but a net 12% still expected to be investing less - the second-lowest on record.
"It is abundantly clear from the survey that the coming 12 months will be the most challenging this economy has faced in more than two decades."
Around the globe, policymakers were working hard to restore "trust" in the financial and economic system.
Trust was the foundation of offering and receiving credit, doing a job and getting paid.
It was the "grease and oil" that allowed the wheels of the global financial system to channel billions of dollars between lenders and borrowers across the world.
The collapse of some financial institutions had dented the circle of trust that underpinned entire business, economic and financial relationship, he said.
The natural responses to weak confidence were lower interest rates and a government being sympathetic to business concerns.
Reserve Bank governor Alan Bollard was expected to aggressively cut interest rates next week - such was the reality of the current economic climate.
Markets also awaited more details of the financial stimulus package proposed by the new National-led Government, Mr Bagrie said.
"The heart of New Zealand's vulnerability to what is happening around the globe resides in poor savings, excessive investment in housing, poor productivity and high levels of debt.
"It's been much of our own making but, clearly, policymakers will need to take a lead role as we navigate our way through."
