AUCKLAND, January 18, 2026 – Business confidence in New Zealand has surged to its highest level in nearly 11 years, according to the latest Quarterly Survey of Business Opinion (QSBO) released today by the New Zealand Institute of Economic Research (NZIER), fueling market speculation that the Reserve Bank of New Zealand (RBNZ) may raise interest rates sooner than previously anticipated .
The survey reveals a dramatic improvement in sentiment, with a seasonally adjusted net 39% of businesses expecting general economic conditions to improve in the coming months. This marks a significant jump from a net 17% in the September 2025 quarter and is the most optimistic reading since March 2014 . NZIER suggests that the economic recovery is broadening, as the effects of low interest rates gradually feed through the broader economy .
This surge in confidence is translating into concrete plans for hiring and investment. The report shows that a net 5% of firms increased staff in the December quarter, and a net 22% plan to hire in the next three months. Furthermore, investment intentions have turned positive, with a net 11% of businesses planning increased spending on buildings .
The survey has intensified focus on the RBNZ’s upcoming policy decision. The central bank is scheduled to conduct its first Official Cash Rate (OCR) review for the year on February 18, with the current rate standing at 2.25% . While NZIER stated that inflationary pressures remain “broadly contained”—with a net 37% of firms reporting increased costs—other analysts sounded a more cautious note .
BNZ Research Head Stephen Toplis highlighted that a net 25% of firms intend to raise prices, a figure he said will “certainly grab the attention” of the RBNZ and is consistent with Consumer Price Index (CPI) inflation returning to the top half of the central bank’s 1-3% target range . Toplis noted that while the data alone might not trigger an immediate rate hike, it strongly supports the view that the next move will be an increase, potentially occurring earlier than the RBNZ’s previous guidance of early 2027 . Market pricing currently suggests a rate hike by October 2026 is likely .
The optimism was not uniform across all sectors. Manufacturing witnessed the most remarkable turnaround, becoming the most optimistic industry after being the most pessimistic in the previous quarter. In contrast, the building sector continues to face challenges due to soft demand, which is keeping a lid on construction cost inflation and pricing power .
The NZ Dollar (NZD) saw strength following the report’s release, trading around 0.5780 against the US Dollar . This robust confidence data presents a positive sign of economic recovery, setting the stage for critical decisions by the central bank in the coming weeks .