Business confidence has lifted over the past month to the most positive reading since December 2021.
ANZ bank's latest business confidence survey rose 13 points to a negative 31.1 points in May, compared with April's negative reading of 43.8 points.
The reading for businesses' own activity was almost back in the black at a negative 4.5 points, compared with 7.6 points in April.
However, ANZ chief economist Sharon Zollner said there was still plenty of negativity around.
Employment intentions eased to a negative 5.7 points from a negative 2.4 in April.
"Inflation expectations inched a little lower and the proportion of firms expecting to raise their prices and wages also fell," Zollner said.
"However, the proportion of firms expecting costs to increase in the next three months remained stubbornly high."
Zollner said profitability remained under pressure as wages continued to climb.
"Overall, it's a push to say there's any downward trend evident in past wage settlements yet, with every sector except services lifting this month."
Zollner said ongoing inflation pressures could derail the Reserve Bank's economic outlook, with the official cash rate expected to have peaked at 5.5 percent.
"The RBNZ perceives widespread sogginess across the economy, making them more relaxed about the extra stimulus being provided by super-strong net migration and more fiscal spending this year than anticipated," she said. "We aren't so sure.
"Things are patchy, certainly, but most activity indicators are well off their lows and rising, while cost and price indicators are inching lower, rather than plunging.
"We continue to expect that the RBNZ will be back at the hiking table by the end of the year."
RNZ
