There's greater optimism from directors about the New Zealand economy

ASB's annual Director Sentiment Survey shows a more upbeat outlook on the future, with 52.2 percent of directors expecting the economy to improve over the next year.

It's a turnaround from 28.3 percent last year.

Chief economist Nick Tuffley says the cost of living is still seen as the number one impediment to national performance - but it's receding.

He says concerns over labour capacity and capability has eased back, likely due to the market not being as tight as the last couple of years.