Consumer confidence has fallen to its lowest point since the global financial crisis amid rising fuel and food prices.
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The Westpac McDermott Miller Consumer Confidence Index shows headline sentiment fell 7 points to 92.1 - the lowest level since 2008.
Any reading in the survey above 100 suggests optimism, while anything below signals pessimism.
The proportion of respondents who thought it was a good time to purchase a major household item, which is regarded as a key measure of consumer sentiment, fell more than 7 points to a net negative 6.9 percent - the lowest reading in 14 years.
This suggests more people think it's a bad time rather than a good time to buy big ticket item.
"New Zealand is being buffeted by a range of powerful economic headwinds," Westpac's acting chief economist Michael Gordon said in a statement.
He said many households were feeling poorer and expected to be worse-off in a year's time as rapid price increases for households' goods, including food and fuel, had outpaced wage growth.
The survey found that lower income households reported the sharpest fall in confidence, as a greater share of their spending goes toward these essential items.
"As well as the rise in consumer prices, higher borrowing costs have taken a bite out of many households' disposable incomes."
The report suggests that consumer sentiment was low in every part of the country with significant falls in both Nelson and Otago.
"That's likely to be related to the significant challenges that the hospitality sector is grappling with, including subdued consumer demand and widespread worker absenteeism as Omicron has rippled through the workforce," the report said.
However, Southland was the only region to record a material rise in sentiment, which lifted 12.3 points to 101.4.
This was attributed to the regions low reliance on hospitality spending and the strong uptick in commodity export prices which was boosting the fortunes for the agricultural and horticultural sectors.
Confidence was split along gendered lines with sentiment among men holding steady compared to the previous survey, while women were considerably more pessimistic about the financial circumstances and the outlook for the economy.
McDermott Miller market research director Imogen Rendall said women were likely to be feeling the squeeze on household finances with prices rising.
Across different age groups, the survey indicates that sentiment amongst young people (aged 18 - 29) had fallen below 100 for the first time.
Confidence amongst people aged 30 to 49 was little changed since the previous quarter at 103.2, while pessimism for those aged 50+ continued to decline, falling to 82.8.
"Not only do a greater proportion in this age group report that they are worse off financially compared to a year ago, a considerable number expect to be worse off this time next year," Rendall said.
"For those on fixed incomes, this prospect must be daunting."
The survey was conducted over 1 March - 17 March with a sample size of 1559. It has a margin of error of 2.5 percent.