Business confidence has all the trimmings of Christmas, rising to an eight-month high in December, according to the ANZ Business Outlook.
ANZ chief economist Cameron Bagrie said there was no denying an improvement in the growth stakes.
With growth picking up, so would employment. Unemployment would not be rising towards 7%; it was more likely to drift back down below 6% in the coming year.
The index recorded a net 23% of businesses were optimistic about the general economy over the year ahead, the highest positive reading since April. All the five subsectors, including agriculture, were positive.
Firms' own activity expectations rose a further two points to 34. Profit expectations increased from 15 to 18, good signs for employment and investments to follow, he said.
Employment intentions rose from 14 to 20 as more firms looked for workers. Investment intentions were unchanged at 15.
Export intentions fell slightly to 19 because of the firmer New Zealand dollar.
Residential investment intentions rose from 23 to 32 and commercial construction intentions improved from 38 to 45, the highest reading since May 2014, Mr Bagrie said.
The ANZ composite growth indicator - which combined sentiment measures from business and consumers - was indicating the potential for GDP growth of above 3%.
However, Mr Bagrie was more circumspect, picking growth in the 2.5% to 3% zone.‘‘That's still mightily impressive considering economic challenges remain, such as the low dairy payout.
''It's testament to the wider forces supporting the economy.''
With the festive season arriving, there was much to ponder, he said.
Volatility across equities, commodities, the New Zealand dollar and international economies was here to stay. Where China and the export price slide would settle remained uncertain and ANZ remained cautious.
The power of the macroeconomic framework should not be underestimated, Mr Bagrie said.
Fiscal policy had firepower, infrastructure investment was being brought forward and the dollar would adjust to shifts in economic sentiment and risks.
‘‘A firmer New Zealand dollar might not be desired but solid-looking economies don't tend to see their currencies weaken. If growth prospects dim, the dollar will wane. Be careful what you wish for.''
