The ANZ New Zealand Business Outlook rose to a net 56.1 in July, up from 36.6 in June, while expected own activity rose to 49.3 from 36.9, according to a report from ANZ Research published Thursday.
Economy-wide reported past activity inched up 1 point to 10, while one-year-ahead inflation expectations fell to 3.1% from 3.4%.
The net percent of firms expecting to raise prices in the next three months fell to 47%, and the firms expecting cost increases fell to 78%.
ANZ Research said this month's data points to growing optimism across New Zealand's economy, with business confidence and firms' own-activity expectations remaining at historically strong levels despite mixed sector performance.
However, forward-looking activity indicators softened later in July following the Reserve Bank of New Zealand's (RBNZ) rate hike and volatile oil prices, even as overall business confidence and firms' own-activity expectations remained robust.
Firms' wage intentions remained broadly unchanged, but continue to run slightly above the RBNZ's forecasts, signaling persistent medium-term inflation pressures despite limited movement in the latest indicators.
ANZ noted that heightened geopolitical uncertainty and volatile oil prices highlight the need to closely monitor business confidence, with the economic outlook depending on whether firms and households keep investing and spending or retreat into survival mode.