Confidence among manufacturers and exporters has fallen to zero, even though their sales in March were more than 12.5 percent higher than in the same month last year.
The Manufacturers and Exporters Association's latest survey shows confidence among its members has dropped from 35 points in February.
Its survey covered $403 million in annualised sales, 55 percent of which were export sales.
Respondent's export sales rose almost 30 percent but domestic sales fell by about 3 percent.
Association chief executive John Walley said comments from respondents made it clear the high New Zealand dollar is hurting both domestic manufacturers who compete with imports and exporters.
Mr Walley said although the Reserve Bank keeps saying the high level of the New Zealand dollar isn not sustainable, it is doing nothing about it other than to welcome the deflationary impact of an appreciating currency.