The Bank of New Zealand's monthly confidence survey recorded the highest level of optimism in 18 months.
A net 42 percent of respondents to the May survey are optimistic about the economy, compared to 14 per cent in April and 34 per cent a year ago.
BNZ chief economist Tony Alexander said the latest survey showed good sentiment in farming, agricultural servicing, forestry and manufacturing for export.
Improvements in sentiment had shown up among accountants, construction, residential and non-residential real estate, and even tourism.
Retailing remained extremely weak and lawyers were not seeing much activity improvement.
"The results suggest caution is still required with regard to the economy's progress in the next few months," Alexander said.
"But 2012 is shaping up to be a strong year and the labour market data from last week and comments in the survey regarding staff shortages suggest some businesses are preparing themselves for that strong environment."
The results revealed that economic conditions remained challenging with tight margins, businesses struggling to pass on cost increases, disruption following the Christchurch earthquake, and some evidence of shortages of skilled staff such as engineers, and some listings shortages for residential and non-residential property.
- NZPA
Kiwis feeling more optimistic: survey
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