Business confidence is at an 11-year high, indicating the New Zealand economy is heading for annual growth of more than 5% by the end of the year.
A monthly survey by the National Bank found optimists outnumber pessimists, with a net 45% of companies expecting their own prospects to improve in the coming year - the highest level since May 1999.
Firms are upbeat, intending to employ more people and invest more. While profit expectations slipped slightly, National Bank senior economist Khoon Goh says they remain healthy.
He says the construction sector remains the most optimistic, while the agriculture sector is the least so.
Mr Goh says inflationary pressures are rising, with companies intending to lift prices.
The data was collected before Fonterra's latest payout forecast and the European sovereign debt crisis intensified.
A net 48% expect general business conditions to improve in 12 months' time, down from 50% in April.
