Business confidence improved in June according to ANZ's latest Business Outlook Survey.
Of the 337 business respondents to the survey, 53.% were feeling more confident compared to the previous survey, 17% were less confident and 30% were unchanged. That meant a net 37% of respondents were more confident in their business outlook, up by 27 points from the last survey in May.
Most of the improvement in business confidence happened prior to the recent sharp fall in oil prices, suggesting confidence levels may continue to improve as long as oil prices continue to ease.
A slim majority (51%) of respondents expected an increase in their own businesses activity levels, compared to the 14% that expected a decline and 35% that expected no change. That gives a net 37% expecting an increase in activity, up from 26% in the last survey.
One of the factors feeding into the improvement in overall confidence was a drop in inflation expectations, with the average declining to 3.36% from 3.63%.
However, most businesses are expecting to raise their own prices, although this dropped to a net 51% from a net 57% in May. The percentage of business expecting to raise their prices was at its lowest level since November last year.
The construction sector showed one of the biggest improvements in overall confidence, with residential construction confidence rising to a net 25% in June compared to 12% in May, while commercial construction confidence rose to a net 29% in June from 14% in May.
Overall confidence in the commercial construction sector is now at its highest level since March.
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