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WELLINGTON, Aug 29 (Reuters) - New Zealand firms cut expectations for future business activity to the weakest level in more than a decade in August, a private sector index showed, in a sign recent aggressive central bank rate cuts were yet to boost confidence.
The New Zealand dollar fell 0.4% to $0.6313 after the survey was released.
An ANZ Bank index of businesses’ views of their own activity over the year ahead fell to -0.5% in August from 5% in July, the lowest reading since April 2009.
The survey’s headline business confidence measure also sank, with a net 52.3% of respondents expecting the economy to deteriorate over the year ahead compared with a 44.3% pessimism level in July.
“Most activity indicators fell again in August to even weaker levels. Employment, investment and export intentions all fell to dismal levels, along with profit expectations,” said ANZ Chief Economist Sharon Zollner.
A net 9% of firms intended to reduce employment, up from 6% in July and the weakest reading of employment intentions since mid-2009, while a profit expectations gauge also fell to a decade low.
The Reserve Bank of New Zealand (RBNZ) stunned markets earlier this month with a steep 50 basis points interest rate cut, hoping that front-loading the stimulus would provide the jolt the domestic economy needed.
ANZ said in its report that the outlook for the economy appears to be deteriorating further, with firms extremely downbeat despite easier monetary conditions.
“Whatever the cause, the risk is rising that it becomes self-fulfilling,” ANZ said. (Reporting by Praveen Menon; Editing by Sam Holmes)