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New Zealand business confidence strengthened in February, flash survey data from ANZ showed on Thursday.
The business sentiment index rose to 11.8 in February from 9.4 in December. The own activity outlook index advanced to 22.3 from 21.7 in the previous month.
However, there was a sharp rise in costs, dampening profitability, the survey showed.
Expected costs advanced 14 points in February. Firms are intending to pass the costs on where they can, with a net 49 percent of firms intending to raise their prices.
Inflation expectations lifted too, from 1.65 percent to 1.78 percent, another step closer to the 2 percent central bank's CPI target midpoint.
The profit expectations index slid to 0.5 from 6.8 in the previous survey period. The employment intentions climbed to 10.6 from 8.8. Final data is due on February 25.