Business confidence has jumped to a 19-month high in ANZ's Business Outlook survey, but the bank's chief economist, Cameron Bagrie, is wary of false dawns.
A net 39 per cent of respondents expect the general business situation to improve over the year ahead, up from a net 23 per cent in the previous survey in December.
Firms' expectations of their own activity, a more reliable indicator, has also strengthened, a net 38 per cent expecting improvement compared with a net 31 per cent previously.
Profit expectations and investment and hiring intentions have also improved, though export expectations are weaker and remain well below the historical average.
ANZ's composite growth indicator, which draws on both its business survey and its consumer confidence survey, is flagging 2.8 per cent growth by the middle of the year.
"But we have been here before," Bagrie said.
"We've seen lifts in business sentiment in late 2009 and into 2010, in mid-2011 and early 2012."
In each case economic growth failed to match expectations.
The missing element is job creation, Bagrie said, with ANZ's job advertisements indicator flatlining.
On the positive side the global environment continues to improve and commodity prices are rising.
Domestically property prices are rising and building consents are up. Statistics New Zealand reported yesterday consents for new dwellings, excluding apartments, in the year ended January were up 23 per cent in number and 32 per cent in value, compared with the year before. But Bagrie said mounting concern about drought and reports of job losses, could weigh on sentiment in the next survey.
The firms he had been speaking to were in cost-containment mode, he said, adjusting operations to what were increasingly seen as structural changes.