The feelings of ease about New Zealand's growing economic dependence on China took a battering in August following the Fonterra milk powder scare, BNZ chief economist Tony Alexander says.
Releasing the latest BNZ confidence survey, Mr Alexander said for the previous three months, a net 44% of survey respondents had each month said they were happy about the country's economic relationship with China.
''This month, that proportion has dropped to a net 28%. This is still a firmly positive result but the decline provides us with the only evidence of how our thinking ... may have changed as a result of the poison milk worries.''
Even though New Zealanders were less sanguine about the relationship with China, and parts of the country had been disturbed by earthquakes, optimism about where the economy would be in a year's time remained strong, he said.
A net 57% of the 582 respondents were optimistic, compared with 59% in August and 56% in July. Confidence remained steady at a high level.
On house prices, the net percent of people feeling happy house prices were rising fell in August, to 11% from 17% in July.
The result was above the average for the past four months of 9% and suggested support for measures which might strongly suppress the housing market might not attract a lot of public support, Mr Alexander said.
