New Zealand’s business confidence recovered in the second quarter of 2026, with a net 12% of firms expecting the economy to improve over the next 12 months, compared with 4% pessimism in the prior quarter, according to the New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion. The rebound was supported by lower fuel prices during the survey period following a tentative US-Iran peace agreement, though renewed Middle East tensions are expected to weigh on sentiment. Firms remained cautious, with a net 10% cutting staff in the quarter, while 1% and 3% expect to reduce employment and investment, respectively, in the current quarter. A net 1% reported improved trading activity, while 10% expect gains next quarter. Cost pressures also intensified, with a net 54% reporting higher costs and expecting further increases, while the same share plans to raise prices, signaling persistent inflation pressures.