Business confidence surged in May with firms buoyed by a strong export sector, the forthcoming Rugby World Cup and the rebuilding of Christchurch.
The National Bank's monthly survey found optimists outnumbered pessimists, with a net 38% of firms expecting the economy to improve over the coming year compared to a net 14% in the previous month.
Firms' own prospects jumped 10 points to a net 40% expecting better times ahead, while profit expectations, employment and investment intentions all rose.
Confidence jumped strongly this time last year only to collapse due to the slowdown, but National Bank chief economist Cameron Bagrie says a recovery appears more substantial this time round.
The survey indicates economic growth of 4.5%. Mr Bagrie says the long, depressed recovery means that rate of expansion is possible but warns the recent rise in the New Zealand dollar could shoot the much-needed export-led recovery in the foot.
More firms intend to lift prices, and expect inflation to rise, though Mr Bagrie says that shouldn't prompt the Reserve Bank to start lifting interest rates until the end of the year.
The central bank is expected to hold its benchmark rate steady at a record low 2.5% next week, after cutting the cost of borrowing in March to bolster confidence and cushion the economy in the wake of the February quake.
