Business confidence in New Zealand has soared to its highest level in a decade, according to the latest ANZ Business Outlook report.

Confidence jumped 23 points to +51 in August, reflecting a significant boost in sentiment.

Expected own activity also climbed 21 points to +37, marking a seven-year high.

However, experienced own activity saw only a slight increase of 1 point, remaining weak at -21.

Despite this, Finance Minister Nicola Willis said the overall outlook is promising.

“It’s so pleasing to see business confidence is the highest in a decade, and firms’ outlook for their own activity, looking 12 months into the future, is the highest in seven years,” Willis said.

“Businesses have been doing it tough for a long time, and today’s report is an indication they see better times ahead,” she said.

The large increases in confidence and activity expectations, including employment and investment intentions, were evident from the beginning of August.

The roughly one-third of responses that came in after the Reserve Bank cut the official cash rate (OCR) by 25 basis points did not significantly change the results.

Pricing intentions also increased, with a net 41% of firms planning to raise their prices in the next three months, up 3 points.

The amount by which they intend to raise prices ticked up from 1.4% to 1.6%.

On a brighter note, inflation expectations dipped from 3.2% to 2.9%, marking their first sub-3% reading since July 2021.

Willis highlighted these developments as evidence of easing economic conditions, with inflation forecasted to fall below 3% this quarter.

“It’s early days and there is still more work to do, but our careful and deliberate plan is working. Like businesses, we are optimistic and confident that brighter days are ahead,” Willis said.