Business confidence lifted in September, suggesting the economy may have hit a "pothole" last month, according to ANZ's latest Business Outlook.

The bank said 38 per cent of respondents to its Business Outlook survey expected conditions to deteriorate in the year ahead, compared with 50 per cent in last month's survey.

In the latest survey, firms' perceptions of their own activity prospects lifted four points to a net 8 per cent expecting an improvement.

Investment intentions fell four points to a net minus 9 per cent.


"It is encouraging that nearly all activity indicators out of the ANZ Business Outlook survey rebounded this month, with only investment intentions deteriorating further," ANZ chief economist Sharon Zollner said.

However, she said the "growth signal" coming out of the survey remained weak.

"But if the indicators continue to rebound, it will increase the odds that while the economy may have hit a pothole, the wheels are not falling off," Zollner said.

The New Zealand dollar rallied by about 20 basis points in response to the release.

"I think that (currency reaction) clearly shows what the market is thinking at the moment - it's a little nervous about not getting evidence that the economy is sharply rolling over after the June quarter GDP data," Phil Borkin, senior macro strategist at ANZ said.

"But it's not like this business confidence survey makes for nice reading," he said. "It just makes for better reading than a month prior," Borkin told the Herald.

Westpac economist Anne Boniface said she suspected that one of the reasons for the weakness in business confidence this year has been firms' unhappiness with some of the new Government's policies, such as planned changes to labour laws.

"In this respect, Prime Minister Jacinda Ardern's speech in late August may have helped support sentiment," Boniface said.


Ardern last month said it would be wrong to ignore the sharp decline in confidence as simply party politics.

ASB said that soft confidence surveys point to a pending deceleration in economic activity on economic activity over the second half of 2018.

"Expectations do not always translate into reality, but the longer that business confidence remains low, the greater the risk to the economic outlook and the more likely the official cash rate will be cut," ASB said.

Poor confidence data has been at odds with official data from Statistics NZ.

Data out this month showed the economy grew by 1.0 per cent over the June quarter - against market expectations of a 0.8 per cent gain, and a string of second tier data such as vehicle import statistics, migration data, and retail sales, have pointed to an economy that is still chugging along at a reasonable clip.

Air New Zealand chief executive Christopher Luxon gave up upbeat message at the company's annual meeting today.

"From a macroeconomic perspective, we see continued strength in the New Zealand economy, despite some of the commentary in the media, and we believe this supports both domestic and outbound travel," Luxon said.

"Inbound tourism is also strong, up around 4 per cent year on year," he said.

The Reserve Bank is set to review its official cash rate tomorrow.

All 19 economists polled by Bloomberg expect the official cash rate to remain on hold at a record low 1.75 per cent.

At the August rate review, the central bank kept the rate at 1.75 per cent and pushed out the timing of the first rate hike, citing weak growth as a concern.

Reserve Bank Governor Adrian Orr has said the next move could be up or down.