Business confidence increased by 27 points in June according to ANZ's monthly Business Outlook Survey, reaching a net reading of 37%.
The survey of 337 businesses found 53% felt more confident compared to the previous month, while 17% were less confident and 30% reported no change. The improvement occurred largely before the recent sharp fall in oil prices.
Businesses' expectations for their own activity also strengthened, with a net 37% anticipating increased activity levels, up from 26% in May. 51% of respondents expected higher activity, against 14% forecasting a decline.
Inflation expectations among businesses dropped to 3.36% from 3.63% in May, contributing to the overall confidence lift. The proportion of firms planning price increases fell to net 51%, down from 57% and the lowest reading since November of last year.
The construction sector recorded one of the largest improvements. Residential construction confidence climbed to net 25% from 12%, while commercial construction confidence reached net 29%, up from 14% and the highest level since March.