Business confidence at fresh 10-year high

• Firms' own activity outlook remains upbeat
• Inflation expectations slowly ticking down

Business confidence has risen again as falling interest rates drive renewed hope into firms.

ANZ's survey for October showed general sentiment rose 5 points on the month before, to a net 66 percent optimism, a fresh 10-year high.

The more closely followed 'own activity' measure was steady at 46 percent optimism.

The bank's chief economist Sharon Zollner said "steady falls in interest rates are injecting new optimism into businesses".

"And it's not just unsubstantiated hope-a smaller net proportion of firms are now reporting that activity is lower than a year earlier, with the sharpest lift for respondents in the construction sector," she said.

But Zollner noted past activity and employment were in negative territory, meaning there were more firms saying activity and employment in the last month were lower than a year earlier.

She said "the pressure remains on".

"That's particularly true of the retail sector, with reported past activity yet to turn higher for this sector. This likely reflects that for consumers, the positive impact of lower interest rates is being offset by worsening job security," Zollner said.

Inflation expectations edged lower from 2.92 percent to 2.82 percent, while price intentions lifted slightly.

Zollner said the survey also suggested the labour market would turn "upwards".

"But given the labour market lags activity considerably, there are still some hard yards to traverse before then," she said.