Australia may be the biggest export market and destination for New Zealanders but the earnings season suggests it isn\'t such a lucky country for the nation\'s biggest companies in the face of a weakening economy and soaring currency. New Zealand firms including Fletcher Building, the biggest on the NZX 50 Index, have cited dwindling returns in Australia in posting earnings that missed analyst estimates. While investors are pondering when the Reserve Bank of New Zealand will start raising interest rates, its Australian counterpart has lowered its growth forecasts, sees growing unemployment and is seen cutting rates. \"It\'s not a recession but it\'s difficult to grow off the same pace,\" said Paul Richardson, chief investment officer at BT Funds Management. \"Industrial companies have had no real earnings per share growth - there has been quite a lot more hunkering down, with consumers putting their wallets away.\" Fletcher Building was hit hard by the Australian government\'s surprise decision to dump a subsidy scheme on home insulation, a move it called \"disastrous\" for the industry. But it also faces substitution from cheaper imports of building products driven by an Australian dollar that is more valuable than the greenback, and a downturn in home building. Australia was already slowing at the start of the year, and there has been a pronounced decline in new residential construction over the past six months,\" chief executive Jonathan Ling said last week. Australia navigated through the global financial crisis without falling into recession, helped by increased fiscal stimulus and demand from China for raw materials. But it has had to grapple with a two-speed economy - one driven by the resources boom and the other reeling from a strong currency and weak consumer demand. House prices plunged by the most on record last year. \"What we are seeing is the stimulus that the government had provided has come to an end,\" said Shamubeel Eaqub, principal economist at the New Zealand Institute of Economic Research. \"That slow down was felt by New Zealand and the rest of the world - now Australian is showing a delayed reaction to the global financial crisis. Australia\'s central bank this month lowered its forecast for 2012 economic growth to 3.5 per cent from the November 4 estimate of 4 per cent. The country\'s unemployment rate is expected to increase to 5.5 per cent this year, after falling to 5.1 per cent in January, Governor Glenn Stevens said. Nuplex Industries, the specialty chemicals maker that supplies the building and printing industries, reported a 32 per cent slump in first-half resin earnings in Australia. The Auckland-based company cited reduced demand from manufacturers and builders and increased competition from imports. \"There is a lot of industry comment about how much businesses have they have devastated by the currency,\" BT\'s Richardson said. The Australian dollar recently traded at US$1.0757, having gained to as high as US$1.1080 in July last year. The kiwi dollar recently traded at 78.04 Australia cents, near the highest in more than four months. Transport firm Mainfreight reported a 5.7 per cent decline in revenue from its international business out of Australia, noting it didn\'t see the typical \"peak\" season of September to December, when demand from retailers usually soars. Michael Hill International, the jewellery chain that counts Australia as its biggest market, said margins from retailing had shrunk in a market it described as \"challenging.\" Exports to Australia rose 8.5 per cent to $10.9 billion in the 12 months ended January 31, amounting to about 23 per cent of New Zealand\'s total shipments overseas, according to government figures yesterday. Exports to China, the second-biggest market, jumped 23 per cent in the same period. Imports from across the Tasman fell 4.3 per cent to $$7.4 billion, falling behind China at $7.5 billion. The RBA left is cash rate unchanged at 4.25 per cent this month. That followed cuts of 25 basis points each in November and December. The central bank is expected to cut the benchmark rate by 45 basis points over the next 12 months, according to the Overnight Index Swap curve