Business confidence surged to a net 37% in June, up from 10% the previous month, according to ANZ's monthly survey.
The own activity measure, tracking firms' expectations for their operations, rose 11 percentage points to net 37%. Firms reported higher profit expectations and said they planned to increase investment, exports and employment.
Businesses' expectations for inflation over the coming year fell to 3.36% from 3.63% in May. The proportion of firms planning price increases hit a seven-month low, and fewer anticipated facing higher costs.
ANZ chief economist Sharon Zollner said the improvement reflected reduced anxiety about the Middle East conflict and oil price pressures. Most survey responses came in before the US-Iran ceasefire and the subsequent drop in oil prices.
"While headwinds persist, this month's survey offers hope that firms and the broader economy can to some extent pick up where they left off before the oil price spike," Zollner said.
Manufacturing emerged as the most optimistic sector, followed by retail, with services the least upbeat. Non-wage costs ranked as a bigger concern for businesses than finding skilled staff.
Zollner said the Reserve Bank would probably review the data before its cash rate decision next week, which she anticipates will be an increase. "The Committee will be feeling their way carefully through coming months as they assess both the capacity of the economy to bounce back, and the persistence of the initial oil price cost shock now that oil prices have dropped sharply," she said.