The latest NZIER Quarterly Survey of Business Opinion shows a further strengthening in business confidence over the September quarter, with a net 26 percent of firms expecting improved economic conditions over the coming months.

The improvement in confidence was broad-based across most regions, with optimists outnumbering pessimists in dairy-intensive regions such as Taranaki and Southland. The recent increase in global dairy prices and subsequent upward revision by Fonterra to its dairy payout forecast have reduced the risks to the dairy sector and boosted confidence. Nonetheless, confidence remains strongest in tourism-intensive regions such as Auckland, Otago and the Bay of Plenty.

Firms are also expecting a strong lift in demand in their own business, with a net 32 percent expecting an improvement in own trading activity over the next quarter - the highest level since mid-2014.