October 31, 2017 / 12:26 AM / a year ago

NZ business confidence sinks to 2-yr low in Oct as political uncertainty weighs -ANZ Bank

WELLINGTON, Oct 31 (Reuters) - New Zealand business sentiment dropped to a two-year low in October as firms grappled with a turbulent political outlook, an ANZ Bank survey showed on Tuesday.

The survey’s headline measure showed a net 10.1 percent of respondents expected the economy to deteriorate over the year ahead. It compared with a flat result in the previous month’s survey.

“The finger can be pointed at political uncertainty,” said ANZ chief economist Cameron Bagrie in a research note accompanying the data.

Most of the survey responses were sent in during a protracted coalition negotiation period led by the small nationalist New Zealand First Party after an inconclusive September election left neither major party with enough votes to form a government.

NZ First eventually cast the centre-left Labour Party in government on Oct. 19, ending almost a decade of centre-right National Party rule.

“This month’s survey primarily covers the uncertainty around the outcome and not the outcome itself,” Bagrie said.

The survey also showed a net 22.2 percent of respondents expected their own businesses to grow in the next 12 months, down from 29.6 percent last month. (Reporting by Charlotte Greenfield and Ana Nicolaci da Costa; Editing by Joseph Radford)

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