Business confidence in New Zealand has jumped 13 points to minus 18 in June, the highest level since November 2021, according to ANZ Business Outlook.

With inflation expectations continuing to decline, the bank’s activity outlook has lept eight points to plus 2.7 – marking the first time in 14 months it is in black. The improvement comes in the wake of the Reserve Bank indicating the official cash rate has reached its peak, suggesting no further increases in mortgage interest rates for the foreseeable future.

Meanwhile, investment intentions are at the highest level since October last year, while cost expectations have registered a “broad-based fall”.

The highest expected cost growth was registered in agriculture at 4.4 per cent while the weakest cost inflation expectations are in the construction sector at 3.6 per cent and manufacturing at 2.7 per cent.

ANZ chief economist, Sharon Zollner said, times remain very “uncertain for businesses” while the pressures on profitability persist from high costs and lower turnover.

“Increasingly widespread expectations that the housing market has found a floor appears to be offering glimmers of hope for the residential construction sector, and finding labour has clearly become much easier as workers have poured in through the border, alleviating a significant source of stress for businesses.”

She added the Reserve Bank of New Zealand wants to see “subdued demand” for a period, however, flagged that “cautious optimism” must be practised, provided inflation indicators fall.