With a less than expected business boost from the rugby world cup, business owners fear New Zealand is heading straight for a recession.

But can the Agricultural sector save us from a full blown Eurozone catastrophe?

The latest edition of The Quarterly Survey of Business Opinion from the New Zealand Institute of Economic Research shows that New Zealand’s economy is losing momentum.

The survey shows confidence is putting on the breaks at this stage, with survey results predicting a 20% chance of a recession this year, figures last seen in 2009.

Businesses are starting to worry about their future says Chief Economist for Westpac, Dominick Stevens.

“The worries about what’s going on in Europe, with the potential sovereignty and default and impacts on the European banking system have finally started percolating through into the New Zealand economy and are bothering businesses.

“So it’s more the businesses are telling us that they are worried about the future rather than particularly experiencing terrible times at the moment.”

The Rugby World Cup was expected to boost profits, but the QSBO results show a net 4% of companies seeing a drop in activity over the last three months of December, and expectations for 2012 also falling.

Results from the survey show New Zealand’s economy has been losing momentum for the past six months.

The only region of New Zealand to see positive results was Christchurch, due most likely to the rebuilding of the devastated city.

But even that resilient region may not be safe.

“The thing that surprised us was the weakness in the construction sector. It looks as though the Canterbury rebuild’s getting under way roughly in the time line that we expected, but it seems, from this survey at least, that construction elsewhere is not vamping up as early as we had expected; so New Zealand’s construction sector has been absolutely in the doldrums and probably the weakest sector for quite some time now.”

But hopes are that the agriculture sector will raise the bar and help New Zealand escape the recession. 

“Agriculture is running very, very strong at the moment indeed and with outputs much higher than year ago levels for example.

“I think a lot of the growth registered in GDP has already occurred and we’ve simply maintained a high level of output through that quarter of 2011.”