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New Zealand business confidence in 'holding pattern' in November

[WELLINGTON] New Zealand firms remained broadly pessimistic about the economy in November, an ANZ bank survey showed on Thursday, though their expectations of their own performance edged up slightly.

The survey's headline measure showed a net 37.1 per cent of respondents expected the economy to deteriorate over the year ahead.

Gloomy business sentiment has been a thorn in the side of centre-left Labour-led government, whose tenure has been marked by growing pessimism which peaked with the index hitting a decade-low of -50.3 per cent in August.

The New Zealand dollar edged down to US$0.6855 after Thursday's release from around US$0.6867.

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Firms have been complaining about a 5 per cent hike in the minimum wage in April, uncertainty over new environmental and immigration regulations and fears that international investors would be spooked by restrictions on foreign homebuying and on new offshore oil-and-gas exploration permit.

The plummet in confidence prompted the central bank to warn it could lead to lower growth in the coming year if firms held back investment.

However, confidence has since improved slightly and Prime Minister Jacinda Ardern set up a council led by Air New Zealand chief executive Christopher Luxon to advise her on firms' concerns.

"Nationally, business sentiment indicators appear to be in something of a holding pattern," said Sharon Zollner, chief economist at ANZ Bank. "Left well enough alone, the New Zealand economy can muddle through."

REUTERS