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New Zealand Business Confidence Falls for First Time This Year

May 31 (Bloomberg) -- New Zealand business confidence fell for the first time this year amid concerns that a European crisis will slow global demand and curb exports, according to an ANZ National Bank Ltd. survey.

A net 27.1 percent of companies polled expect the economy will improve in the next 12 months, down from 35.8 percent in April, ANZ National said in an e-mailed report. The net figures subtract pessimists from optimists.

The gauge declined for the first time since December as export intentions fell to a three-year low as Europe’s debt turmoil weighs on commodity prices and returns from overseas sales, which make up 30 percent of the New Zealand economy. The change in mood adds to the case for the central bank to keep interest rates unchanged until next year.

“This is not the stuff of which an export-led recovery is made,” ANZ National’s Wellington-based Chief Economist Cameron Bagrie said in the statement.

New Zealand’s dollar has dropped 7.9 percent in the past month, and that may boost sentiment in June, Bagrie said. A strong currency helped slow exports this year.

The currency bought 75.12 U.S. cents at 1:12 p.m. in Wellington from 81.85 cents on April 30.

A second gauge of sales and profits expectations fell to 34.9 percent from 36.1 percent in April. That’s a level consistent with businesses “getting on with it,” Bagrie said.

A net 14.9 percent of the 415 companies surveyed expect exports to rise, down from 22.9 percent last month, the report showed. Expectations around profits and hiring were little changed from April, while fewer firms expect to increase investment, it said.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

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